Mortgage rates extended their losing streak to a whopping TWO (2) days yesterday. Scary! No not really though. Although borrowers who were floating their note rate did see closing costs rise by a few basis points, in the grand scheme of things, the increases were tiny. Gotta put it in perspective...

The most aggressive loan pricing we've ever witnessed was offered by lenders last Friday. If you were trying to call a bottom, that's the latest one.  The Mortgage Bankers Association confirmed this for us today when they released the results of their Weekly Loan Applications Survey.

From the Release:

"The average contract interest rate for 30-year fixed-rate mortgages decreased to 4.59 percent from 4.69 percent, with points increasing to 1.04 from 0.96 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.  This was the lowest 30-year contract rate ever recorded in the survey. "

When the modest two day change in consumer borrowing cost is put in that light, a TWO(2) day losing streak doesn't seem all that bad. Does it?

Before you answer, I have more bad news to share. Total consumer borrowing costs rose again this morning, this time the increases were bigger though. Lenders worsened loan pricing by almost 20 basis points!  This extended the mortgage rate losing streak to a month long THREE(3) days.

I still have one more thing to share, this time it's good news: LENDERS REPRICED FOR THE BETTER THIS AFTERNOON!

They were a bit slow to do so and it took a hefty sell off in stocks to force it out, but lenders eventually reprice for the better this afternoon. Some reprices were big enough to erase the previous two days of weakness, but most just offset the cost increases seen this morning on first pricing releases.

The best par 30 year fixed mortgage rates are still in the 4.375% to 4.625% range.  4.50% is "best execution" on a no points loan.  These quotes assume a borrower has minimal risk-based loan level pricing adjustments. On conventional loans, this means borrowers with 740+ middle FICO scores, looking to do an 80% or less loan to value  rate and term (or purchase) on their primary residence. If this is not your credit/collateral profile, your borrowing cost will be higher. The highest rates that should be charged: 5.25% (lots of LLPAs!)

Because mortgage rates are near all time lows,  more and more consumers (not as many as last year) are coming down off their fences and applying for a refinance. Refinance demand is driving activity in the mortgage market. The MBA's refinance applications index hit a 14 month high last week! This means lenders are  operating near full-capacity.  When this happens, lenders generally let loan pricing worsen to slow down new loan production.  This is playing out right now in the primary mortgage market...(at three very large lenders specifically)

The manner in which loan pricing worsened today (wider primary/secondary spreads) indicates some lenders are trying to slow down the pace of new loan production via higher mortgage rates (relative to MBS prices/yields).   Besides potentially higher borrowing costs, consumers and loan officers should also notice  longer "turn times" at lenders, which is basically the amount of time it takes to go from application to closing.

Have you noticed longer "turn times" lately?