Mortgage Rates Improve For First Time in October

Interest Rates

Domestic economic data and the
exuberance over the European debt situation were both fairly lackluster today,
and  Mortgage
improved decisively for
the first time October.

The 30yr Fixed Best-Execution rate fell an eighth of a
point at most lenders, though the volatility continues to lead to a
wider-than-normal variety among lenders.

Despite the improvement, if you’re
seeing local or national news talking about rates in the “high 3’s,
that info is already out-dated
as Best-Execution rates are now solidly
back in the 4’s.  
that end, thankfully, Freddie Mac
is out with this week’s Primary Mortgage Market Survey, showing average rates
back up to 4.12.

Today’s Rates: 

  • BESTEXECUTION 30YR FIXED –   4.125%, variation between lenders
  • FHA/VA
    3.75%, Still plenty of 3.875’s
    –  3.375 or 3.5% depending on lender
  • 5 YEAR ARMS –  low
    to mid 3% range, variations from lender to lender.

Ongoing Guidance At 4.25%
Best-Execution Levels:
you can
approach the upcoming days in one of two ways: either rates will continue
higher, and the general range of rates would be 4.25-4.75% in terms of Best-Execution,
OR we’ve hit a wall of sorts, and can either bounce lower or hold steady. 
The more days you wait to determine this, the more money you’ll lose if the
first scenario plays out and the more you’d gain if the second scenario plays
out.  If rates don’t look like they’re holding steady or improving by the
end of this week, we’d be locking everything (and fairly close to that
sentiment already, but feel it’s at least one day too soon to say for sure).

New Guidance: Yesterday we talked about being close to 4.25% and
potentially locking at a loss if things worsened today.  But now that things have improved, what do
you do if you picked up an eighth of a percent improvement in rate?  Just like the spectrum would suggest in the
graphic below, you’d definitely be leaning more toward locking at the 4.125
level, but not unequivocally so.  If you
don’t mind putting the eighth you just gained back at risk for the chance to go
down another eighth, tomorrow will be an informative day as to how optimistic
we’ll be about further improvements.

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