January 11, 2013
Mortgage rates were essentially unchanged Today. On average, rates were slightly higher to begin the day, but an afternoon reversal in bond markets was sufficiently strong to prompt many lenders to release positively revised rate sheets. That tipped the scales back toward a slight improvement on the day with Best-Execution for 30yr Fixed, Conventional loans continuing to hold in the 3.375% to 3.5% range.
(Read More:What is A Best-Execution Mortgage Rate?)
With respect to rate sheet offerings from lender to lender, there are a few notable outliers at the moment. Year-end/New-year pricing strategies as well as lenders' responses to last week's volatility have made for a higher-than-normal degree of stratification. Some lenders are "business as usual," adjusting rate sheets in the same proportion to market movements as they were in November/December. Other lenders progressively became more conservative and continue to lag the rest of the pack when markets are improving and to raise rates quicker when markets are deteriorating.
Loan Originator Perspectives
"Rates remain LOW--- please take advantage while you are able. Get your loan in process even if you are not locked. This will give you the most advantageous position to lock at a desired rate!!" -Bob Van Gilder, Finance One Mortgage
"After a disappointing start to the day, MBS have managed a nice rally to move back into positive territory. The benchmark 10 year is also flirting with the 1.87 level. Closing below that would be a good sign but has been unable to hold that for the past few days...strong resistance. I rarely like locking on a Friday and that holds true today especially when you consider the late day rally we are having. If your lender comes out with a strong reprice better, you may want to consider locking if you are closing in the short term, but i favor floating everything over the weekend." -Victor Burek, Open Mortgage.
"Market searching for direction is a scary thing sometimes. The day started ugly, but has improved afternoon. Some reprices for the better rolled in so maybe we end the week on a positive note. Wait until Monday to lock." -Mike Owens, Partner with HorizonFinancial, Inc.
"We've settled into a new trading range, .125 to .25% higher in conforming rates than December lows. Good news is that FHA's and VA's are hanging in there at 3.25% in most cases. As we mentioned yesterday, just because rates are reasonably stable is no reason to assume they'll stay that way. Fed members have been mentioning the dreaded "I" word recently (as in Inflation), and it doesn't take much of that to roil the bond markets under the best of circumstances! " -Ted Rood, Senior Originator, Wintrust Mortgage.
"Rates held near record lows to end 2012, then rose .125% to start 2013 (after some tiny progress on U.S. fiscal policy and concern over waning Fed support of MBS markets as this year progresses), and we end this week at those slightly higher levels. It's unlikely rates will spike in the next 1-2 weeks, but upside rate risk outweighs a rate drop for now. Rate shoppers should act accordingly. " -Julian Hebron, Branch Manager, RPM Mortgage.
Today's Best-Execution Rates
- 30YR FIXED - 3.375 - 3.5%
- 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 have risen moderately from their all-time lows, making for relatively increased reward for floating at the expense of greater risks of loss.
- Rates could easily move higher or lower, and unscheduled, unexpected events can ultimately have the most say in the direction.
- Near term risks in 2013 include the upcoming debt-ceiling debate in Washington as well as the Fed's policy outlook regarding securities purchases.
- (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).