Mortgage rates are very slightly lower in many cases after surging on Friday to the highest levels in nearly 10 months. That said, some lenders continued higher today while others were essentially flat. Overall, the average Best-Execution rate is moderately lower today, but very close to Friday's latest levels. That means that the shift from 3.625 to 3.75% continues to be supported so far this week. 3.75% is the highest best-execution rate we've recorded since May of 2012.
Perhaps taking a cue from the unofficial Daylight Savings Time canon, markets definitely "slept-in" today. Both Treasuries and Mortgage-Backed-Securities (MBS) scarcely budged after moving violently on Friday and putting in the biggest full week of losses in exactly 1 year last week. Even though there wasn't much going on in markets, this speaks to the recently higher level of indecision in bond markets and makes the near-term outlook relatively less certain.
Whatever certainty existed had been slowly and steadily confirming a long-term upward trend in rates. We don't have any reason to believe that trend has ended, but we would note that Treasury markets haven't been able to decisively break above 2.06 to close a session so far this year despite a few attempts that have come close. For those who hold out hope--even if only for a medium-sized correction inside a larger trend higher in rates--that hope is in the same uncertain position this afternoon as it was on Friday.
Loan Originator Perspectives
"Rates have been slowly and steadily climbing since the Fed indicated a possible end to asset purchases may be getting nearer. Given the recent trend, we are still advising clients to lock at application." -Alan Craft, Acopia Home Loans.
"Quietest day in weeks in rate markets today, which beats losing ground daily as we have been. At least the rate quotes I gave out on Saturday aren't defunct! Not surprising to see things level out after losing that much ground that quickly. The big question is whether we'll get any drama or data to help us regain some pricing! Stay tuned....." -Ted Rood, Senior Originator, Wintrsut Mortgage.
"Some times you feel like a nut, sometimes you don't. Nutty market--- stay connected with your mortgage originator, be diligent. Rates remain attractive and sometimes can drive you nuts! " -Bob Van Gilder, Finance One Mortgage.
Today's Best-Execution Rates
- 30YR FIXED - 3.75%
- FHA/VA - 3.375-3.5% (varies more between lenders than conventional 30yr Fixed)
- 15 YEAR FIXED - 3.00%
- 5 YEAR ARMS - 2.625-3.25% depending on the lender
Ongoing Lock/Float Considerations
- Rates have risen moderately but consistently since hitting their all-time lows in September and October 2012.
- Regardless of global or domestic economic weakness, the subsiding fear of a disorderly EU breakup will continue to prevent rates from getting back to those lows.
- This is very likely to be the case unless a similarly panic-inducing event were to come into focus, or if a disorderly break-up regained the spotlight.
- Sequestration, negative growth, and generally choppy political and economic environments around the world DO NOT constitute that sort of panic.
- This is a "rising rate environment" until further notice, though pockets of recovery and consolidation can provide smaller-scale opportunities against the larger-scale backdrop.
- (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).