After moving higher every day this week mortgage rates finally held their ground today. Despite moderately lower Treasury yields and healthy improvements in the mortgage-backed-securities market, the actual rates that made their way onto lenders’ rate sheets represented more of a “ground-holding” than a triumphant “bounce back” to previously lower levels. This can often be the case in the wake of several days of weakness and some lenders tend to be more conservative with rate movements on Fridays.
The net effect is a Conventional 30yr Fixed Best-Execution rate that is now shying away from a move higher to 3.5% and sticking around at 3.375% despite threatening to move higher yesterday. The minor improvement today is nice in the short term, and the outright levels are also excellent in the overall history of mortgage rates, but in the intermediate term, this is still quite a bit weaker than last week’s pricing. Bottom line, if you were quoted a rate last week, it’s still not likely to be available under the same terms today.
Loan Originator Perspectives
“Nice MBS rally today should lead to better rates, but after a rough week
leading up to today, we’re not seeing lenders adjust pricing
meaningfully better. Yet. Could come this afternoon Pacific time. If
better pricing comes out, we’ll look to lock certain clients. Otherwise
floating into Monday. ” -Julian Hebron, Branch Manager, Loan Agent, RPM Mortgage.
“Nice to see price improvement on a Friday for a change. We haven’t
recouped all the ground lost over the past week or two, but something is
better than nothing. Trying to convey that to my clients who
procrastinated and failed to start their loans when rates were 3.25%.
It’s ALWAYS better to have the loan in progress, whether you float or
lock, than to wait until the exact, sometimes fleeting, moment when
rates hit their lows!” -Ted Rood, Bank Star
Today’s Best-Execution Rates
- 30YR FIXED – 3.375%-3.5%
- FHA/VA – 3.25% (varies more between lenders than conventional 30yr Fixed)
- 15 YEAR FIXED – 2.875%
- 5 YEAR ARMS – 2.625-3.25% depending on the lender
Ongoing Lock/Float Considerations
- Rates and costs continue to operate near all time best levels
- Rates could easily move higher or lower, but given the nearness to all time lows, there’s generally more risk than reward regarding floating
- This will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn’t always mean they’re done improving.
- (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario. There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you’re following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).