March 10, 2014
Mortgage rates leveled-off today, after rising to 2-month highs after last Friday's Employment Situation ('Jobs Report'). Today's rates were just slightly lower, but apart from Friday, were as high as they've been since early January for most lenders. 4.5% remains the most prevalently quoted conforming 30yr Fixed rate for the best-qualified borrowers (best-execution). When adjusted for day-to-day changes in closing costs, rates moved lower by an equivalent of 0.02% today.
In terms of scheduled events that could have an effect on rates, this week begins slowly and remains slow until Thursday morning. That doesn't mean that financial markets won't see enough volatility to push rates higher or lower--simply that such volatility would not immediately follow an important scheduled event as it did on Friday. It is positive to see resilience today, considering strong movement after the monthly Jobs Report tends to create lasting momentum more often than not, but it's too soon to rule that out based on one day of holding ground.
Loan Originator Perspectives
"The lack of continued selling from Friday and the better than expected NFP report is a positive, without a doubt. I still believe the trend is toward higher rates, overall, but we may get some slight improvement this week considering last week was the worst in nearly a year. Be cautious but if you have the stomach for it, cautiously float and be ready to lock." -Brent Borcherding, Capital M Lending
"After Friday's beat down, rates have managed to improve today. We don't have much of any meaningful economic data until Retail Sales and unemployment claims on Thursday. I recommended to float over the weekend, and I would continue to float. Starting to see more and more news out of Ukraine indicating the situation there is far from over and that could help mortgage rates continue to improve. " -Victor Burek, Open Mortgage
"A sedate Monday in rate markets today as we improved slightly from Friday's closing levels. No significant economic news until Wednesday, barring any international drama we should be fairly stable. Good news is that short term there is little motivation for rates to worsen, bad news is that there's also limited prospects for them to improve!" -Ted Rood, Senior Mortgage Planner, Wintrust Mortgage
Today's Best-Execution Rates
- 30YR FIXED - 4.5%
- FHA/VA - 4.00%
- 15 YEAR FIXED - 3.375%
- 5 YEAR ARMS - 3.0-3.50% depending on the lender
Ongoing Lock/Float Considerations
- Rates moved gradually higher into the end of 2013 and reversed course with a nice move lower in January 2014, helped along by a weak employment report on January 10th. This report raised doubts as to whether or not the Fed would continue tapering asset purchases at the same pace.
- The Fed has stayed the course on their $10bln per meeting reduction in bond buying, though rates got an ostensible push lower from weakness in stocks and emerging markets. As soon as those moves ran their course, the rate rally bottomed out as well. That bounce has been as low as rates have gone so far this year. Now we're tentatively waiting for the next move.
- Because of the unseasonably cold/snowy weather across much of the country, market participants are hesitant to stray too far from the narrow range carved out during February (because it clouds the validity of the economic data).
- As soon as investors can have more confidence that the incoming data is an accurate representation of economic conditions, we should see more willingness for rates to react accordingly, with weaker data helping keep rates lower and stronger data pushing them back toward January's highs.
- (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).