November 27, 2012
Mortgage rates across multiple lenders were much more unified in their movement versus yesterday. Most lenders where unchanged to moderately improved and the overall range of that movement (or lack thereof) was significantly smaller than it has been in recent days. The net effect for today is a 30yr Fixed Best-Execution rate that remains at 3.375% for Conventional loans.
Financial markets had been waiting for news on Greece's debt-reduction deal with Eurozone Finance Ministers and the IMF. While a deal was, in fact, reached, it fell short of unequivocally guaranteeing Greece's next bailout payment. In general, this is moderately helpful for interest rates and moderately negative for stocks and the European currency. These aren't hard and fast connections, but indeed some of the improvement in today's mortgage rates can be traced back to tepid response to this news.
Later in the morning, markets shunned stronger than expected Consumer Confidence data and in separate news, Senate Majority Leader Reid noted a frustrating lack of progress on the Fiscal Cliff negotiations. Both of these events helped interest rates in broader bond markets as well as the secondary mortgage market, continue to move lower throughout the day. Rates have made up a good amount of ground from their worst levels of the month, but remain roughly in the center of that range.
(Read More:What is A Best-Execution Mortgage Rate?)
Loan Originator Perspectives
"We're holding for any further rate improvements going into the afternoon. If we don't see them, we will lock slight improvements we've already seen since yesterday. Locking client loans near record lows is a safer bet than floating given today's resounding slate of better U.S. economic data and a can-kicking deal in Greece. Normally these events would cause bonds to sell and rates to rise, but so far it's the opposite and have a short-term lock bias accordingly. " -Julian Hebron, Branch Manager, RPM Mortgage.
"Mortgage backed securities moving higher as the afternoon winds down. Many lenders have repriced better but havent passed along all the gains. I would recommend floating over night then most likely locking anything closing within the next 15 days." -Victor Burek, Benchmark Mortgage.
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).