September 16, 2016
Mortgage Rates were unchanged again today, on average. Some lenders were modestly better than yesterday. Others were modestly worse. But all were fairly close. This is an eerie level of stability given the fact that rates looked like they were finally breaking out of a 2-month-long holding pattern earlier this week. That said, it could be the case that rates are simply waiting for next week's policy announcement from the Fed before locking in their final answer.
While stability is good, the outright levels are still higher than they were. In fact, with the exception of Monday, this week's rates are the highest in more than 2 months. Silver lining: "high" is still pretty darn low, historically, with 3.5% remaining the most prevalent conventional 30yr fixed quote on top tier scenarios.
Potential volatility remains at least through next Wednesday's Fed meeting.
Loan Originator Perspective
I have never been a fan of locking on Friday, but I am leaning that way today. The common theme of the last week or so has been each time bonds rally, sellers come out quickly so I don't see much benefit in floating right now. The trend continues to not be our friend right now. If your lender pricing is better today, I would lock. If your lender pricing is worse, I would then look to float over the weekend. -Victor Burek, Churchill Mortgage
Today's Best-Execution Rates
- 30YR FIXED - 3.5%
- FHA/VA - 3.25%
- 15 YEAR FIXED - 2.75%
- 5 YEAR ARMS - 2.75 - 3.25% depending on the lender
Ongoing Lock/Float Considerations
- In the biggest of pictures, "global growth concerns" remain the driving force behind the long-term trend toward lower rates
- Amid that trend, periodic corrections toward higher rates can and will happen. These can happen for no apparent reason, or they can be brought on by changes in expectations surrounding central bank policy at home and abroad, as well as geopolitical and systemic risks
- Time horizon and risk tolerance are 2 variables to consider when it comes to locking. If you have plenty of time and don't mind losing some ground, set a limit as to how much higher rates could go before you'd lock to avoid further losses, and then float in the hopes of never seeing that limit.
- In the shorter-term, it's always good to look for lock opportunities after rates have been moving lower or sideways repeatedly, especially if they've since begun to move back up in any sort of consistent way.
- 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, conventional 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).