Mortgage Rates Fight to Find Ceiling
December 2, 2016
Market Summary
During the course of this week, mortgage rates spiked to their highest levels in well over 2 years. Most of the movement happened on Thursday, partly by way of reacting to new of an OPEC production cut agreement (which implies higher oil prices, and thus higher inflation--an enemy of interest rates) and partly due to expectations for next week's European Central Bank announcement (Europe is expected to allude to tapering its bond buying--something that contributes in a big way to generally low rates around the world).
In a somewhat shocking turn of events, Friday saw rates snap back and recover all the ground lost on Thursday. Not only that, but there was no overt motivation for the bounce (at least not that big of a bounce). That's the sort of thing that suggests rates are trying to establish a ceiling at Thursday's highs--hopefully one that lasts a bit longer than the most recent ceilings.
That said, it's still by no means safe to assume this ceiling will be any more durable than the last 7. We need to see a sustained push back toward lower rates before it would make any kind of sense to abandon a defensive, lock-biased strategy.
-Matt Graham, Mortgage News Daily
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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4.19%
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Ending Average: |
4.13% |
Weekly Change: |
-0.06% |
Yearly Change: |
+0.19% |
Friday, November 25, 2016 : 4.19% (+0.01%)
Mortgage rates were unchanged-to-slightly-higher today, depending on the lender. Most lenders put out rate sheets in fairly conservative territory on Wednesday for the express purpose of not needing to mess with them too much today. With the Friday after Thanksgiving being an early close for bond markets, lenders tend to check in once in the morning to set rates high enough that they won't be forced to issue "reprices" (mid-day rate sheet changes) on that off chance of market volatility.
Monday, November 28, 2016 : 4.14% (-0.05%)
WARNING: this article's headline makes the overall mortgage rate situation sound much better than it actually is. While it is indeed a fact that today's rates are lower than the previous business day's rates by the widest margin since Brexit, caveats abound. First off, the Brexit move was more than twice as big. Today's move is only slightly better than a handful of other decent days over the past 5 months.
Tuesday, November 29, 2016 : 4.10% (-0.04%)
Mortgage rates continued lower today. While the pace of improvement was slightly slower, it was enough to get the average lender rate sheet back to levels seen last Tuesday. That makes this the first time since before the election that rates haven't been significantly higher week-over-week. It's also the first time in more than a month where rates have moved lower 2 days in a row. Normally, such accomplishments would be no big deal, but when we're backing down from the highest rates in more than a year, every little bit helps.
Wednesday, November 30, 2016 : 4.13% (+0.03%)
Mortgage rates rose moderately today, bringing them roughly back in line with Monday's levels. For the record, that leaves us in slightly better shape than last week, which saw the highest rates in more than a year. Today's bond market weakness was driven primarily by the much-anticipated OPEC deal. What is the OPEC deal and why is it impacting mortgage rates?
Thursday, December 1, 2016 : 4.24% (+0.11%)
Mortgage rates spiked abruptly today, bringing them to the highest levels in well over 2 years. The average lender is now quoting conventional 30yr fixed rates of 4.25% on top tier scenarios with more than a few already up to 4.375%. You'd have to go back to the summer of 2014 to see a similar mortgage rate landscape.
Friday, December 2, 2016 : 4.13% (-0.11%)
Mortgage rates erased yesterday's losses after today's jobs report, though not necessarily because of it. The Employment Situation (affectionately referred to as "the jobs") is traditionally one of the biggest sources of market movement. So when rates make a big move following the jobs report, it's only natural to assume a cause and effect relationship. That said, most of the credit for today's move goes other places.
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Today's Rates
30 Yr FRM
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4.13%
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-0.11
|
15 Yr FRM
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3.34%
|
-0.11
|
FHA 30 Year Fixed
|
3.85%
|
-0.10
|
Jumbo 30 Year Fixed
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4.20%
|
-0.05
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5/1 Yr ARM
|
3.03%
|
-0.04
|
|
Average Mortgage Rates
15 Yr. Fixed
|
3.05%
|
1.21
|
-0.03
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30 Yr. Fixed
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3.74%
|
1.37
|
-0.06
|
30 Yr. Fixed
|
3.66%
|
0.33
|
-0.04
|
15 Yr. Fixed
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2.95%
|
0.38
|
-0.04
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30 Yr. Jumbo
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3.64%
|
0.28
|
-0.05
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30 Yr. FHA
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3.52%
|
0.21
|
-0.04
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5/1 ARM
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2.92%
|
0.40
|
-0.07
|
30 Yr. Fixed
|
4.08%
|
0.50
|
+0.14
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15 Yr. Fixed
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3.34%
|
0.50
|
+0.20
|
1 Yr. ARM
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2.68%
|
0.20
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+0.01
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5/1 Yr. ARM
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3.15%
|
0.40
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+0.08
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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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99.44
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+0.31
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30YR FNMA 3.5
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102.58
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+0.23
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30YR GNMA 3.0
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101.15
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+0.26
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30YR GNMA 3.5
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104.23
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+0.28
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15YR FNMA 3.0
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102.80
|
+0.17
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15YR FNMA 2.5
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100.22
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+0.16
|
2 YR
|
1.1076%
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-0.0434
|
5 YR
|
1.8340%
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-0.0659
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10 YR
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2.3940%
|
-0.0523
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30 YR
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3.0697%
|
-0.0363
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Prices as of: 12/2/2016 4:31PM EST
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