Mortgage rates moved lower after the FOMC's announcement, that's how they reacted!!!

Loan pricing actually improved twice today. Once this morning when lenders first published rate sheets, and then once again this afternoon following the release of the monetary policy statement. Lenders were not quick to pass along lower consumer borrowing costs though, in fact I would say they were pretty hesitant about it.  Most reprices for the better were not awarded until late in the afternoon, even then, not all lenders participated in the party. This is likely a factor of how volatile markets got in the minutes following the release. We can also point toward the fact that many lenders are now more worried about losing a portion of their previously locked deals to another lender. This would increase their funding costs and eventually be passed down to the consumer.

The post-FOMC bond market rally brings mortgage rates back to where they were last Tuesday, which was the best day to lock last week. 4.25% is still the best execution (in terms of points and rate) 30 year fixed mortgage rate for well-qualified borrowers, closing costs should be cheaper though. There are scattered reports of lenders willing to go lower than 4.25%, but those quotes are not widespread and borrowers hoping for that rate should expect to pay higher fees at the table. 

Just like lenders, I am hesitant to offer directional advice, at least until the dust settles and we get a better idea of where rational minds are allocating their funds. From a BIG PICTURE perspective, the environment remains supportive of low mortgage rates, whether or not they go even lower is really a factor of how much the economy slows down. We saw consumer borrowing costs move as low as 4.00% ( lower at some lenders) over the summer, so we can't rule out the possibility of it happening again. Unfortunately, the window to lock in those rates was open for a very short time. For the most part, the best no cost mortgage rate the majority of consumers have been offered is 4.25%, which is what a perfect refinance/purchase candidate would be quoted today.

With that in mind, if you've been floating, wishing you'd locked last week, the smart move is to pull the trigger and get locked in ASAP, as long as your costs improved today. If you've been watching and waiting for another shot at those record low rates at or below 4.00%, they aren't available right now, but we think you're safe to keep waiting. If this position changes, we will alert. Let's see how this plays out....