March 12, 2013
Mortgage rates are mixed to lower today, but some lenders are still in worse shape than yesterday afternoon's latest offerings. This stratification around unchanged levels belies the day-over-day changes in bond markets, including the mortgage-backed-securities (MBS) that most directly influence mortgage rates. That said, a few lenders did release positively revised rate sheets in the afternoon after a day of steady improvement in MBS. Best-Execution is still at 3.75% with 3.625% still viable for many scenarios.
(What is A Best-Execution Mortgage Rate?)
Up until now, the week's data and events have been almost completely silent in the sense that there hasn't been much inspiration for market movements apart from news headlines. That leaves traders in the position of watching the trading itself for cues and clues. Observing this dynamic suggest today's bond market strength (which typically equate to lower rates) is more of a leveling-off process, getting into a relatively more neutral stance for the next move higher or lower. The direction of the move stands it's best chance of being informed, in the near-term, by tomorrow morning's key data--Retail Sales--as well as the afternoon's 10yr Treasury Auction.
Loan Originator Perspectives
"As of early this afternoon, few lenders have repriced better despite MBS improving throughout the day. Many of the rate sheets I've seen actually show worse pricing today than yesterday despite the higher MBS price! I favor floating overnight and let's hope lenders pass along some improvement tomorrow morning. " -Victor Burek, Open Mortgage.
"Some decent gains today after yesterday's respite from recent losses. It's possible we've stopped the rate market bleeding, will want to see a few more days of gains to be sure. At any rate, we've gained about 30 bps over last week's lows, hopefully there's more to come!" -Ted Rood, Senior Originator, Wintrsut Mortgage.
"Minor improvement in rates today despite a more meaningful MBS rally suggesting the improvement should be more. Some locking opportunities vs. yesterday on purchase and refi clients. Rate shoppers should take these little dips seriously because the 2013 trend has been generally upward on rates with these little 1-2 day dips along the way. " -Julian Hebron, Branch Manager, RPM Mortgage.
Today's Best-Execution Rates
- 30YR FIXED - 3.75%
- FHA/VA - 3.375-3.5% (varies more between lenders than conventional 30yr Fixed)
- 15 YEAR FIXED - 3.00%
- 5 YEAR ARMS - 2.625-3.25% depending on the lender
Ongoing Lock/Float Considerations
- Rates have risen moderately but consistently since hitting their all-time lows in September and October 2012.
- Regardless of global or domestic economic weakness, the subsiding fear of a disorderly EU breakup will continue to prevent rates from getting back to those lows.
- This is very likely to be the case unless a similarly panic-inducing event were to come into focus, or if a disorderly break-up regained the spotlight.
- Sequestration, negative growth, and generally choppy political and economic environments around the world DO NOT constitute that sort of panic.
- This is a "rising rate environment" until further notice, though pockets of recovery and consolidation can provide smaller-scale opportunities against the larger-scale backdrop.
- (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).