Mortgage Rates Level Off Ahead of Fed Announcement
March 15, 2013
Market Summary
In stark contrast to last week, which saw the biggest single week increase since March 2012, mortgage rates leveled noticeably this week. Best Execution levels shifted in favor of 3.75% after last Friday's Employment Situation Report and the baby steps back in the other direction have brought 3.625% back into the realm of viability for several lenders, depending on the scenario. Lower rates continue to be available, but borrowing costs are higher.
"It's tempting to consider the past 5 days of ground-holding or moderate improvements as some sort of defensive line against the tide of rising rates," say Matthew Graham, Rates Strategist at Mortgage News Daily. "Indeed, we can't ever rule out that could be the case, but longer term trends remain decidedly negative. The one difference this time around compared to previous corrections to the trend is that this one wasn't the result of favorable headlines. Moreover, it's been much flatter and more consistent. This could allude to a bit more organic resolve in holding these levels."
Silver linings aside, Graham isn't sold on the bounce back and says market participants aren't either. "Simply put, it looks like rates ratcheted higher last week, leveled off this week, and are now waiting on next Wednesday's FOMC Announcement (and Press Conference) for more guidance. This is the one explanation of recent movement that makes the most sense and it implies that we could move higher or lower from this new-found perch between 3.625 and 3.75% best-execution. Last week I said that these pockets of stability present important short term locking opportunities, and that continues to be the case until the longer-term uptrend is broken. I hope it breaks, but I'd defend against the possibility that it doesn't. "
30 Year Fixed Rate Mortgage
Week in Review
Rates shown below are based on the 30 Year Fixed Rate Mortgage
Beginning Average:
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3.71%
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Ending Average: |
3.67% |
Weekly Change: |
-0.04% |
Yearly Change: |
-0.27% |
Friday, March 8, 2013 : 3.71% (+0.08%)
Mortgage rates vaulted higher today at their fastest pace since late January, after the Employment Situation showed an unexpectedly high number of jobs created in February. The Employment Situation is the most important piece of domestic economic data each month and always has the potential to greatly impact markets. This was indeed the case today, and it brings 30yr Fixed Best-Execution up to 3.75% for the first time since May 2012. Lenders are still offering lower rates, but at greatly increased costs. For every $100k in loan amount, you'd pay an extra $700 of closing costs to keep yesterday's rates at an average lender. On average, the costs associated with 3.625% yesterday are the same costs associated with 3.75% today.
Monday, March 11, 2013 : 3.70% (-0.01%)
Mortgage rates are very slightly lower in many cases after surging on Friday to the highest levels in nearly 10 months. That said, some lenders continued higher today while others were essentially flat. Overall, the average Best-Execution rate is moderately lower today, but very close to Friday's latest levels. That means that the shift from 3.625 to 3.75% continues to be supported so far this week. 3.75% is the highest best-execution rate we've recorded since May of 2012
Tuesday, March 12, 2013 : 3.69% (-0.01%)
Mortgage rates are mixed to lower today, but some lenders are still in worse shape than yesterday afternoon's latest offerings. This stratification around unchanged levels belies the day-over-day changes in bond markets, including the mortgage-backed-securities (MBS) that most directly influence mortgage rates. That said, a few lenders did release positively revised rate sheets in the afternoon after a day of steady improvement in MBS. Best-Execution is still at 3.75% with 3.625% still viable for many scenarios.
Wednesday, March 13, 2013 : 3.69% (+0.00%)
Mortgage rates were flat on average today, but continued to be stratified depending on the lender. In other words, some rate sheets were moderately better than yesterday's latest while others were slightly worse. That said, most were fairly close to yesterday and several lenders improved pricing in the afternoon after a stronger-than-expected Treasury auction gave a lift to MBS (the mortgage-backed-securities that most directly affect mortgage rates). Conventional 30-yr Fixed best-execution remains at 3.75% though several lenders are closer to 3.625%.
Thursday, March 14, 2013 : 3.69% (+0.00%)
Mortgage rates were flat for the third day in a row, despite strong economic data and a weak 30yr Treasury Auction (two things that normally connote higher rates. Bond markets had already weakened appreciably overnight, however, and were thus in a better position to digest the data. MBS (the mortgage-backed-securities that most directly influence rates) clawed their way back to unchanged levels by 2pm Eastern time, and mortgage rates followed suit with many lenders "repricing" from higher rates this morning to something more in line with yesterday's rate this afternoon. As such, Best-Execution remains at 3.75 with 3.625% close by.
Friday, March 15, 2013 : 3.67% (-0.02%)
Mortgage rates improved modestly, capping a week that's seen rates either move sideways or slightly lower every day. Today's stability and ultimately, improvements came as the result of uneventful overnight trading and a small surge in "asset allocation" trading out of stocks and into bond markets after stocks opened. General bond market strength benefits MBS, the securities that most directly affect mortgage rates. Weaker-than-expected Consumer Sentiment data continued to keep demand high for less-risky assets, ultimately leading many lenders to offer improved rate sheets in the afternoon. The net-positive week brings 3.625% back into focus as a Best-Execution rate, but 3.75% is more prevalent. Lower rates are available for increased upfront costs, but this becomes less and less efficient from 3.625%.
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Today's Rates
30 Yr FRM
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3.67%
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-0.02
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15 Yr FRM
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2.97%
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-0.01
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FHA 30 Year Fixed
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3.37%
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-0.03
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Jumbo 30 Year Fixed
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3.79%
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-0.01
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5/1 Yr ARM
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3.01%
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+0.00
|
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Average Mortgage Rates
15 Yr. Fixed
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2.78%
|
0.76
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+0.08
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30 Yr. Fixed
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3.53%
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1.11
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+0.06
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30 Yr. Fixed
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3.70%
|
0.39
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-0.07
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15 Yr. Fixed
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2.96%
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0.36
|
-0.07
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30 Yr. Jumbo
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3.80%
|
0.37
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-0.13
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30 Yr. FHA
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3.47%
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0.33
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-0.07
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5/1 ARM
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2.55%
|
0.37
|
-0.10
|
30 Yr. Fixed
|
3.63%
|
0.80
|
+0.11
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15 Yr. Fixed
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2.79%
|
0.80
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+0.03
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1 Yr. ARM
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2.64%
|
0.40
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+0.01
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5/1 Yr. ARM
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2.61%
|
0.60
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-0.02
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* FHFA averages are updated monthly. ** Mortgage Bankers Association (each Wednesday) and Freddie Mac (each Thursday) averages are updated weekly.
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Secondary Markets
30YR FNMA 3.0
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102.72
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+0.33
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30YR FNMA 3.5
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105.28
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+0.22
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30YR GNMA 3.0
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104.19
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+0.31
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30YR GNMA 3.5
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107.22
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+0.16
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15YR FNMA 3.0
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105.13
|
+0.16
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15YR FNMA 2.5
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103.63
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+0.27
|
2 YR
|
0.2540%
|
-0.0120
|
5 YR
|
0.8339%
|
-0.0452
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10 YR
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1.9929%
|
-0.0437
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30 YR
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3.2148%
|
-0.0282
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Prices as of: 3/15/2013 4:01PM EST
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