Mortgage rates crept just barely lower today, but it was enough to leave the average lender's rate sheet in its best shape since May of 2013.  (At the risk of splitting hairs, a few lenders were offering better rates for part of the day on February 11th, 2016.)  

The point is that rates are really low.  Unlike the early February time frame, this time around, rates have moved lower in a steadier way.  While that doesn't mean they can't bounce higher, it does mean there's less risk of a major bounce higher without a major calendar event causing it.  Back in February, rates bounced higher at the fastest pace of the year simply because they moved so much lower so quickly.  In simpler terms: we prefer the tortoise to the hare when it comes to rate rallies.

But what about those "major calendar events?"  We do have a few of those coming up, and if you absolutely don't want to risk losing current rates, you should be aware of them.  The first is next week's Fed Announcement (Wed, June 15th).  The other next is the British vote to exit the European Union on June 23rd, but we will know more about how to gear up for that based on next week's Fed Announcement.  

Loan Originator Perspective

"The overnight session saw yields on the 10 year note break to their lowest levels in several years and through resistance at 1.66.  Rate sheets are improved, and there is nothing ever wrong with locking in the gains.  I am not a fan of locking on Friday, so I would float over the weekend and see if this trend can continue."  -Victor Burek, Churchill Mortgage

"Interest rates continue to test new recent lows caused by foreign interest rate action.  With foreign interest rates hitting new all time lows, one has to wonder "how low will it go"?  I am seeing the best rates/pricing I have in quite some time and I am starting to push locking a bit more than I traditionally do.  All that considered, I do think we have some more room to go on this rally before a reversal.  Remember what goes up must come down and vice versa. But as always "the trend is your friend", and the current trend is lower rates..  Loans closing in 30 days or less should consider locking, loans 7-10 days out should be locked.  Have a great weekend." -Constantine Floropoulos, VP, The Federal Savings Bank

Today's Best-Execution Rates

  • 30YR FIXED - 3.5-3.625%
  • 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

  • Markets are primarily concerned with the timing of the Fed's second rate hike (after they first hiked in December 2015)
  • After bottoming out fairly close to all-time lows in February, rates have been in an increasingly narrow range just above all-time lows  

  • Fed hike expectations come and go, creating volatility within that low, narrow range.  Things won't get serious until we actually break out of that range.
  • After fears increased that the Fed would hike in June, the current flavor of the month is that they'll hold off until at least July.  This has helped rates move back toward the lower end of that long term range.  These have historically been good locking opportunities in 2016 (because rates tend to rise back toward the higher end of the range shortly after hitting the lower end).  That trend won't continue forever, but until it is broken, it provides a useful way to know how advantageous current rates are, relative to other recent offerings.
  • 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).