November 4, 2014
Mortgage rates recovered somewhat after moving to the highest levels in nearly a month yesterday. That sounds more dramatic than it is considering the exceptionally slow and steady move toward higher rates from mid-October. Ironically any day during this seemingly pervasive move higher would still qualify as the best day of the year had it occurred before early October. As of yesterday, however, that is getting very close to no longer being the case.
In other words, we're now right to the edge between the previous 2014 lows and this new, lower range achieved over the past 3-4 weeks. With 3 days of significant market events ahead, we'll likely see either a reinforcement of this barrier between "then and now" or simply (and sadly) a move back up into the previous range of 4.125% and higher. As it stands, the most prevalently-quoted top tier rate is still 4.0% by a small margin. Further weakness would tip the balance to 4.125%.
Loan Originator Perspective
"Rates seems to be threatening to move higher although reluctantly. Some impetus may be needed to move them higher and that may come with economic data points scheduled for the rest of the week, namely the all important Jobs Report on Friday and the ECB decision on Thursday along with Jobless Claims. In my view, risk is too great to float any loans other than potentially those with longer closing horizons." Hugh W.Page, Mortgage Banker, Seacoast National Bank
"Another day spend waiting for rates to decide where they're going, and no answer yet. We'll know far more throughout this week as we get jobs numbers and economic data. My pricing was better today, locked one while holding (for now) on some others. Tight deals who won't qualify with higher rates/costs need to lock, others will depend on borrowers' risk tolerance!" -Ted Rood, Senior Mortgage Originator
Today's Best-Execution Rates
- 30YR FIXED - 4.0-4.125
- FHA/VA - 3.5-3.75
- 15 YEAR FIXED - 3.25
- 5 YEAR ARMS - 3.0 - 3.50% depending on the lender
Ongoing Lock/Float Considerations
- The hallmark of 2014 has been a narrow range in rates. Too many market participants bet on rates going higher in 2014, and markets punished that imbalance with a paradoxical move lower.
- European markets helped that process along and continue to play a prominent role in keeping US rates lower than they otherwise might be.
- For most of the Summer and early Fall months, rates held a narrow range of 4.125% -4.25% (essentially where the 2014 rate recovery has bottomed out) and finally broke to a 3.875%-4.0% range in mid-October. It's too soon to tell if this is a brief window of opportunity or the continuation of 2014's very gradual improvements.
- As always, please keep in mind that the rates discussed generally refer to what we've termed 'best-execution' (that is, the most frequently quoted, conforming, 30yr fixed rate for top tier borrowers, based not only on the outright price, but also 'bang-for-the-buck.' Generally speaking, our best-execution rate tends to connote no origination or discount points--though this can vary--and tends to predict Freddie Mac's weekly survey with high accuracy. It's safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie's once-a-week polling method).