September 30, 2016
Mortgage Rates were mixed today, with some lenders in slightly weaker territory while others offered modest improvements versus yesterday. The dichotomy has to do with the timing of yesterday's market movements. Bond market began the day in weak territory yesterday but improved noticeably by the end of the day. Some lenders sent out updated (better) rate sheets while others stood pat. Lenders whose rates increased today tended to come from the group that offered improvements yesterday afternoon. Long story short, there was a brief window of the week's best rates for some lenders yesterday with everyone getting mostly back on the same page today.
Fortunately, that page is still a good one. While rates aren't quite as low as they were earlier this week, they're still much lower than they were earlier this month. 3.375% is still the most prevalent conventional 30yr fixed quotes on top tier scenarios. That's the lowest stably-held rate of all time (there have been lower rates, but only for a few days here and there), even though the upfront costs are slightly higher than they were in early August. That's splitting hairs though! The point is that, unless you're examining day-to-day rate movement under a microscope, rates have been holding steady near all-time lows.
Loan Originator Perspective
If you missed this morning's opportunity to lock and your lender has already repriced for the worse, here is what i would advise. If the 10 year closes at or below 1.60 i would float until Monday. If your lender hasn't repriced worse or if we close over 1.60, I would lock in today if closing within 30 days. -Victor Burek, Churchill Mortgage
MBS prices have remained at the recent highs, which are not far off from all time highs. I would strongly consider taking the risk off the table and locking in at these levels, even though I am tempted to float the weekend and see how the Deutsche Bank drama plays out. Today closes the month and the quarter, and we now look to December for a possible Fed rate hike. We may not be at the lowest rates ever, but we sure are close. Trying to catch a falling knife is never easy, and can be extremely painful if mistimed. -Gus Floropoulos, VP, The Federal Savings Bank
Friday afternoon saw treasury yields back at 1.60, which is exactly where we started Monday. The last trading day of the month often sees bonds rally due to portfolio requirements, but today seems to be an exception. Like much of the past few months, both treasuries and MBS seem content at current levels. I don't see a great deal of potential in floating, if the news of possible German bank defaults didn't boost bonds, not sure what will. Float with caution, or lock and relax. Happy Friday! -Ted Rood, Senior Originator
Today's Best-Execution Rates
- 30YR FIXED - 3.375%
- 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).