November 26, 2012
Mortgage rates once again saw a greater-than-normal degree of stratification between lenders, meaning that some of them offered lower rates today while others moved their rate sheets higher. This is partly due to the relative mess that the Thanksgiving holiday makes of US markets every year. Because Friday was only a half day (for markets, officially) and because Thursday is a full market closure, many lenders simply choose to stay closed on Friday and thus, do not put out rate sheets. Those that did, may have done so more conservatively than they otherwise would. On a final note, different lenders had different approaches leading up to the 4 day weekend, thus making for quite the variety of rate sheets between then and now.
Whatever the case, rates are moderately lower when averaged among all the lenders in our survey, though there are some notable exceptions. Regardless of the changes, both last week's and today's rate sheets indicate a 3.375% Best-Execution rate for 30yr Fixed, Conventional Loans. When we discuss movement in rates against the backdrop of an "unchanged" Best-Execution rate, it means that the differences in rates vs the previous session(s) are seen in the form of COST (such as the closing costs or credit associated with that particular rate quote).
The week ahead promises to be significantly more involved for markets than the traditionally slow Thanksgiving week. Market participants are waiting for potentially important news regarding the latest installment of bailout funding for Greece. There's also much more economic data on tap, including GDP on Thursday, as well as Treasury Note auctions on the central three days of the week. All of the above can have some effect on how mortgage rates shape up into the end of the month.
(Read More:What is A Best-Execution Mortgage Rate?)
Loan Originator Perspectives
"Not much movement on rates for sure. I don't see a big swing either way until the fiscal cliff is handled and even then it is hard to say which direction we go. The Middle East is always close to the breaking point. That will also have an impact. I favor locking to avoid any chance of a spike in rates. " -Mike Owens, Partner with Horizon Financial, Inc.
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).