December 27, 2013
Mortgage rates recovered modestly in most cases, falling just below the highest levels in more than 3 months. As has been the case for the entire week, the bond markets that underlie mortgage rate movement were exceptionally quiet. There haven't been any significant developments for them to react to, and market participation is too low to muster much of a reaction anyway.
As such, we've simply been drifting in the direction of the last hard push back in early November. Unfortunately that "push" was in a moderately higher direction. The pace has been fairly gentle compared to what we endured this summer, but even though the interest rates being quoted aren't rising as quickly, the closing costs associated with those rates have been drifting higher and higher.
In this way, 4.625% can remain as today's most prevalently quoted rate for ideal, conforming 30yr Fixed loans (best-execution), but with higher closing costs than last week. 4.75% is not far from taking over.
Loan Originator Perspectives
"More stagnation today as borrowers, lenders, and bond traders continue their holidays. Once again the 10 year treasury yield (which indirectly influences mortgage rates) touched 3%. Doubtful there will be any meaningful improvement in rates until economic data slows or US fiscal/world drama reappears." -Ted Rood, Senior Originator, Wintrust Mortgage
Today's Best-Execution Rates
- 30YR FIXED - 4.625%
- FHA/VA - 4.25%
- 15 YEAR FIXED - 3.5%
- 5 YEAR ARMS - 3.0-3.50% depending on the lender
Ongoing Lock/Float Considerations
- The prospect of the Fed reducing its asset purchases weighed heavy on interest rates for the 2nd half of 2013, causing volatility and generally pervasive upward movement.
- Tapering ultimately happened on December 18th, 2013. Markets had done so much to come to terms with it ahead of time that it essentially just confirmed the the 6 month move higher in rates, but didn't make for another immediate spike higher.
- That said, we should assume that we're still in a rising rate environment on average.
- NOTE: Lenders will be adjust rate sheets at various times in December and January to account for the most recent hike in Guarantee Fees. This will unequivocally raise rates by at least an eighth of a percent for almost every borrower, and in most cases .25-.375%. Depending on the lender, those changes will take place overnight and have already begun.
- (As always, please keep in mind that our Best-Execution rate always pertains to a completely ideal scenario. There are many reasons a quoted rate may differ from 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).