Mortgage rates pulled off a come-from-behind victory following today's Fed Announcement.  This time around, the Fed wasn't at all likely to make any changes to the Fed Funds rate, but investors were still curious to see how the Fed worded the statement in light of January's market turmoil.  As far as Fed statements go, today's ended up being noticeably more gloomy and markets reacted accordingly.  Stocks and rates both fell in the afternoon.

Before than rates began the day in slightly higher territory.  That means most lenders released positively revised rate sheets after the Fed statement.  The improvements brought the average lender right back in line with yesterday's rates, themselves inline with recent multi-month lows.  The most prevalently-quoted conventional 30yr fixed rate remains in a range of 3.75-3.875% on top tier scenarios.

Loan Originator Perspective

"Locking in at these levels seems to be the smart decision.  2% on the 10 year treasury is a huge barrier to break through and until it does you have to be prepared for a move higher in rates.  " -Brent Borcherding,

Today's Best-Execution Rates

  • 30YR FIXED - 3.75-3.875%
  • FHA/VA - 3.5%
  • 15 YEAR FIXED - 3.125-3.25%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • The Fed finally hiked on December 16th.  The baseline implication would be steady pressure toward higher interest rates, but there's been "a catch" so far in 2016
  • Global financial markets have come into the new year in distress.  Major stock indices are plummeting around the world, and investors are seeking shelter in the bond market.  When investor demand for bonds increases, rates fall.

  • So we're left with a move toward the lowest mortgage rates in 7 months despite the Fed having just begun its hiking cycle.  This paradoxical trend can continue as long as global risk markets continue selling-off.  The big risk is for a big bounce if global risk markets happen to find their footing. 

  • As always, please keep in mind that the rates discussed generally refer to what we've termed 'best-execution' (that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also 'bang-for-the-buck.'  Generally speaking, our best-execution rate tends to connote no origination or discount points--though this can vary--and tends to predict Freddie Mac's weekly survey with high accuracy.  It's safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie's once-a-week polling method).