December 4, 2012
Mortgage rates continued yesterday afternoon's positive momentum, moving back to their best recent levels. In fact, rates were fairly close to those levels by the end of yesterday's session. So even though they're technically back to their recent lows, the day-over-day change in a rate quote at any given lender might hard to notice. Best-Execution for 30yr Fixed Conventional Loans remains at 3.375% but at these lows, 3.25% is increasingly viable depending on the lender and scenario.
The underlying financial markets were aggressively silent today, including the mortgage-backed-securities (MBS) that most directly influence lenders' rate sheet offerings. Stocks and Treasury yields have fallen for the past two days, but exuded more of a "bottoming out" attitude today. All other things being equal, such movements can allude to the ending of trend, but in today's case, it's likely as simple as a 'distinct lack of data' to move markets today combined with anticipation for the quicker pace of events tomorrow.
It's not uncommon to see markets take a break from recent momentum on such days, essentially growing calmer before the storm of data. That said, there's never a way to be sure of how volatile a reaction those events will create and which direction things will go. It's worth noting that mortgage rates haven't been any lower than this in over a month (some exceptions here, depending on the lender), and that interest rates in broader bond markets were only lower during the low volume time frame between Veteran's Day and Thanksgiving. To reiterate, this alone doesn't necessarily mean rates are destined to bounce higher tomorrow, but economic data would likely need to surprise to the downside in order to suggest meaningfully lower rates in the near term.
(Read More:What is A Best-Execution Mortgage Rate?)
Loan Originator Perspectives
"It's all Fiscal Cliff, all the time these days, as the market ignores virtually everything else. Friday's jobs report would ordinarily be the focus today through Friday, but may now be just an afterthought. Bottom line: Waiting to start a loan these days js both risky and ill advised. Lock or float, just don't procrastinate getting your loan going!!" -Ted Rood, Senior Originator, Wintrust Mortgage.
Today's Best-Execution Rates
- 30YR FIXED -3.375%
- FHA/VA - 3.25% (varies more between lenders than conventional 30yr Fixed)
- 15 YEAR FIXED - 2.875% - 2.75%
- 5 YEAR ARMS - 2.625-3.25% depending on the lender
Ongoing Lock/Float Considerations
- Rates and costs continue to operate near all time best levels
- Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
- This will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.
- (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario. There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).