November 30, 2012
Mortgage rates moved lower on Friday, ending the week and the month in line with their best levels in nearly two months. Today's improvements were moderate and the rates, while strong, are similar to other strong days since early October. The Best-Execution rate for 30yr Fixed, Conventional loans is easily 3.375% and for some scenarios, easily 3.25%, depending on the lender. Lower rates are available, but the costs to obtain them may not make sense for most.
Markets were rather calm for a "month-end" Friday. Trading levels in the secondary mortgage market stayed relatively close to yesterday's best levels despite a bit more weakness in US Treasuries. There was little, if any reaction to the day's data and headlines. Next Friday is more likely to see markets respond to economic data as it brings the monthly Employment Situation report, one of the few reports capable of generating meaningful movement in bond despite the recent prominence of Fiscal Cliff headlines. For more discourse on lock/float consideration, yesterday's thoughts still apply well.
(Read More:What is A Best-Execution Mortgage Rate?)
Loan Originator Perspectives
"More partisan political posturing on Capital Hill today has kept rates in check. No quick resolution to the fiscal cliff is in sight, but if it were to happen, rates would suffer. Best advice: if you're at 4.5% or above, talk with a lender NOW, why pass on the lowest rates in generations?" -Ted Rood, Senior Originator, Wintrust 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).