Mortgage rates were mixed today, depending on the lender. Some lenders adjusted rates higher in the middle of the day to reflect bond market weakness while others maintained the same rate sheets all day long. The lenders in that second group are more likely to move higher with tomorrow morning's first rate sheets, all other things being equal.
In other words, bond market weakness amounts to unpleasant medicine and lenders could either choose to take it today or tomorrow. Those who took it today quickly found themselves back in line with the highest rates of the past few days, but the movement is still small compared to last week. In fact, today's weakness would only be seen in the form of slightly higher closing costs for the same "note rates" quoted yesterday. 3.75% remains the most prevalently-quoted conventional 30yr fixed rate, with several lenders continuing to offer 3.625%.
Today's Best-Execution Rates
- 30YR FIXED - 3.75%
- FHA/VA - 3.25%-3.5%
- 15 YEAR FIXED - 3.00%
- 5 YEAR ARMS - 2.75 - 3.25% depending on the lender
Ongoing Lock/Float Considerations
- The Fed finally hiked on December 16th, causing fears of rising rates in 2016, but markets began the new year with rates moving surprisingly lower. Major losses in stocks and oil prices were part of the same trend of investors moving away from risk.
- After bottoming out fairly close to all-time lows in February, rates have seen only brief episodes of volatility in a low, narrow range.
- The Fed's most recent announcement at the end of April reinforced their cautious approach to rate hikes. This helped rates improved through mid May
- Now some investors are getting concerned that the Fed may be more prepared to hike rates than markets currently expect. This could create volatility and pressure toward higher rates heading into the June Fed meeting, thus favoring locking vs floating.
- 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).