March 4, 2013
Mortgage rates moved slightly higher in most cases on Monday, though some lenders were essentially unchanged from Friday's latest offerings. Despite the moderate weakness, with the exception of Friday, today's rates are in line with February lows, though the range has been narrow. 3.625% continues to be the most prevalent Best-Execution rate with reasonably priced "buy-downs" for those interested in paying more upfront cost in exchange for lower rate.
(What is A Best-Execution Mortgage Rate?)
If Friday's trading day was slow and uneventful, today's was completely switched-off. There were no significant events and no major economic data releases. This won't be the case later in the week as important employment data begins coming in on Wednesday and the all-important Employment Situation report will be out on Friday morning. Along with the policy announcement from the European Central Bank on Thursday (or more appropriately, the press conference that follows), there promises to be more to consider for the bond markets that guide interest rates.
Loan Originator Perspectives
"To start the week, we're locking price sensitive clients and very cautiously floating clients with more risk tolerance to see if Treasuries and MBS hold at current levels, because if so, rates could improve slightly." -Julian Hebron, Branch Manager, RPM Mortgage.
"Rates pretty sedate today, and that's not necessarily a bad thing. There's some rumblings of more pending EuroDrama, and that will keep rates in check if it comes to pass. Just locked a loan (rather than floating). I was paying ALL my clients' costs and getting them a great rate, so why gamble? " -Ted Rood, Senior Originator, Wintrust Mortgage.
"Rates not doing much in the way of change from last week. With the big market mover on Friday, I'm advising everyone to go ahead and lock their rate now or atleast have an application in my hands so I can minimize the damage by locking if needed. Might have a surprise report that helps rates, but you can't bank on it. A bad NFP would typically help so maybe we break down closer to 2012 levels. " -Mike Owens, Partner, Horizon Financial Inc.
Today's Best-Execution Rates
- 30YR FIXED - 3.625%
- FHA/VA - 3.25% - 3.5% (varies more between lenders than conventional 30yr Fixed)
- 15 YEAR FIXED - 2.875%- 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).