Much like yesterday, mortgage rates rallied early this morning following weak housing data.
Much like yesterday, mortgage rates came under pressure in the lunch hours today as mortgage-backed securities prices fell from intraday highs.
Much UNLIKE yesterday, mortgage rates never recovered from that weakness heading into the market close today.
The bad news isn't all that bad though....
While several lenders did reprice for the worse this afternoon, the majority of rate sheets escaped unscathed. This leaves mortgage rates close to the most aggressive levels of our lifetime. As for the lenders who did reprice for the worse (the bad news), adjustments to loan pricing simply cancelled out the improvements seen this morning, leaving consumer borrowing costs unchanged on a day over day basis. Unchanged is better than higher right?
BEWARE: if mortgage-backed securities prices decline in the morning, the lenders who did not reprice for the worse today will have to account for twice as much weakness tomorrow.
The most aggressive 30 year fixed mortgage rates, conventional and
FHA, remain in the 4.250% to 4.500% range. If your loan pricing is subject to minimal "risk based" loan
level pricing adjustments, a few lenders are offering 4.125% for less
than two points at closing. A few might even offer 4.00%.
If you have a strong indication of how long you intend to mortgage your property, you may want to consider an ARM, as long as the fixed period is longer than 5 years. Otherwise I would steer clear of ARMS because fixed rate quotes are just too cheap! If you're currently paying "interest only" on your loan, congrats! You don't need to come off the fence just yet, rates should be low for some time.
The "best executed" lock/float strategy comes down to finding an originator who knows the loan market, studies underwriting guidelines, and just plain old gets the J.O.B done. You have to let the loan officer earn their commission. That's how you "ride the float boat" in this environment...make sure you have a damn good skipper. Plain and Simple.