July 23, 2014
Mortgage rates were mixed today depending on the lender and the time of day you look. Most recently, the average lender is back to unchanged vs yesterday. Before that, most lenders were in slightly better shape, but market weakness prompted widespread reprices. On an individual basis, some lenders are slightly higher or lower, especially if they didn't reprice with the rest of the market.
4.125% remains the most prevalently-quoted conforming 30yr fixed rate for top tier scenarios. Any changes in quotes from yesterday would only affect the closing costs, and even then, they'd be minimal. In addition to being unchanged this week, rates continue to hold an exceptionally narrow long term range as well. Rates have held between 4.125 and 4.25 for well over 2 months. It continues to be the case that next week's busy calendar of important economic events stands the best chance to break the monotony. Until that happens, both risk AND reward for locking or floating remain lower than normal. That said, if you choose to float, make sure to set a line in the sand somewhere at slightly higher rates where you'll cut your losses and lock if the market moves against you.
Loan Originator Perspective
"So, even thought the bias has been to some improvement in pricing we've been hanging around these levels for awhile now. This hints at a lack of conviction by the markets to want to move lower perhaps looking for some stronger impetus and direction. That may come next week with the end of the month lead up to the all important Jobs Report on Friday, August 1st. I would be inclined to lock if I was within 15 days of closing to protect against a bounce higher. For longer lock periods, check your tolerance for risk and keep in close touch with your mortgage professional." Hugh W. Page, Sen. Mortgage Consultant, Capital Partners Mortgage
"I continue to favor locking here following the old, lock the lows, float the highs. Yields have not been able to break convincingly below 2.47 on the benchmark 10 year note. " -Victor Burek, Open Mortgage
Today's Best-Execution Rates
- 30YR FIXED - 4.125
- FHA/VA - 3.75%
- 15 YEAR FIXED - 3.375%
- 5 YEAR ARMS - 3.0-3.50% depending on the lender
Ongoing Lock/Float Considerations
- The hallmark of 2014 so far has been a disconcertingly narrow range in rates. Too many market participants bet on rates going higher in 2014, and markets have punished that imbalance with a paradoxical move lower.
- As of June, rates were officially lower year-over-year, but that's due to rates' path higher in 2013. The current path in 2014 remains sideways.
- European markets continue to play a nagging role in the background, generally helping rates in the US remain lower than they otherwise might be.
- From a wider point of view, we're in limbo, waiting for the first significant move away from the narrow range. A rally into late May stood a chance to act as this break, but rates have since returned to what were previously the lower limits of the 2014 range.
- 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).