Yesterday, we noted that Mortgages Rates were essentially unchanged. By comparison, today is even more unchanged! Certainly, Best-Execution offerings for 30yr Fixed Conventional loans are no different than they were yesterday. The only perceptible changes are to the costs associated with those rates, and even then those changes are barely noticeable. (read more about Best-Execution calculations).
Reinforcing the sideways movement is the fact that the small changes in borrowing costs seen between lenders were higher in some cases and lower in others. This left our survey average completely unchanged today–only the third time this year that this has happened.
Markets are ostensibly still waiting on two key events, Greece’s private sector bond swap, (which we described in a previous post) and tomorrow morning’s Employment Situation Report. Given that many reports are claiming that the official tally for Greece’s private sector participation will be released tomorrow morning, that really concentrates all of our risk at that time.
Keep in mind that most lenders have a lock cut-off time, after which, today’s rates are no longer lockable. Balance that against the fact that tomorrow’s market moving events will happen BEFORE most lenders have new rate sheet offerings available to lock. Long story short, if you like what you see today, it’s not guaranteed to be available tomorrow.
Naturally, there’s also the possibility that the Jobs report is worse-than-expected, which would likely lead to improved rate sheet offerings. As always, “high risk events” don’t mean the market will necessarily move in one direction or another, simply that greater potential exists for larger-than-average movements. Sometimes things just end up going sideways too…
Today’s BEST-EXECUTION Rates
- 30YR FIXED – balanced between 3.875% and 4.0%
- FHA/VA -3.75%
- 15 YEAR FIXED – 3.25%
- 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
- Current levels have experienced increasing resistance in improving much from here
- There are technical reasons for that as well as fundamental reasons
- Lenders tend to get busier when rates are in this “high 3’s” level and can throttle their inbound volume by raising rates or costs.
- While we don’t necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
- But that will always be the case when rates operating near historic lows
- (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).