December 26, 2012
Mortgage rates remained essentially unchanged this week as markets are essentially still closed for the Christmas holiday. Technically, financial markets are open for business today, but the amount of business actually being conducted is extraordinarily small. What little movement we've seen has been at least supportive of mortgage rates holding their ground. Because of that, several lenders' rate sheets are fractionally better than Monday's though the average movement is almost imperceptible. Conventional 30yr Fixed Best-Execution remains at 3.375% for most lenders, though some lenders can offer compelling alternatives at 3.25% for some scenarios.
(Read More:What is A Best-Execution Mortgage Rate?)
Even though today's market movements were barely capable of fogging a mirror, we're not assuming that will necessarily continue to be the case simply because it's a holiday week without any major scheduled data. The key consideration has been and will be the Fiscal Cliff in the immediate foreseeable future. In that sense, today's slowness is logical as politicians aren't expected to be back in action until tomorrow. We'd reiterate, at least in the short term, that the upside risks for rates outweigh the possibility of significant improvements. Rates could languish sideways and perhaps improve slightly if a deal continues to be elusive, but could move sharply higher for several days or weeks if we get some sort of positive surprises out of Washington.
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, but uncertainty surrounding the Fiscal Cliff is applying upward pressure.
- 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).