After a rough morning, the secondary mortgage market recovered enough to claw
back nearly to yesterday’s levels. That
leaves borrowing costs required for average Mortgage
Rates unchanged to marginally higher depending on the lender.
This basically makes today a
non-event in the sense that there’s no change to yesterday’s “current market”
rates, and leaves next week’s FOMC meeting as the next big event with
market-moving risk. European headlines
also continue to be a factor-one which does not adhere to a schedule and can
certainly affect our mortgage rates here at home.
CURRENT MARKET*: The BestExecution 30-year fixed mortgage rate
is no longer solidly at 4.125%, but now straddles 4.125% and 4.25%
Several lenders are willing to offer lower rates, but in most cases,
those quotes carry additional closing costs. On FHA/VA 30 year fixed BestExecution
is straddling 3.875% and 3.75%, (no change). Deals
can be structured with lower rates, but again, you’ll pay more for those, so
make sure you assess the time it takes to break-even on the extra
expense. 15 year fixed conventional loans are best priced at 3.375% (no
change). Five year ARMs are best priced at 3.125% (no change). Please
note there can be a fair amount of variety between lenders and that this has
been exaggerated by recent market volatility.
GUIDANCE: In terms of BestExecution rates, we’re no longer closer to
moving down than moving up. If you still
have access to the same rate as Wednesday, the arguments for locking it in have
greatly increased. We’d continue to caution that much of the current
strength in bond markets is due to uncertainty in Europe and the headlines that
can change that outlook DO NOT adhere to a schedule. In other words, things can change rapidly.
We continue to favor locking due to the nearness to all-time lows. If
you’re absolutely determined to “float it out” or otherwise don’t
have an urgent need to refi but are just waiting to see if rates get better, it
seems that markets are shifting their focus to next week’s high-risk event, the
2 day FOMC meeting on the 20th and 21st, not to mention
ongoing potential for unexpected headlines between now and then.