Mortgage Rates continued lower today as drama in Europe came roaring
back. In short, EU drama is and has been
increasing the demand for safe-haven investments, such as US Treasuries. Mortgage-Backed-Securities (MBS), which most
closely govern mortgage rates TEND to move in the same direction as US
Treasuries. In cases like this where we
have “panic” and/or “flight-to-safety,” MBS can be thought of as indirect
beneficiaries, essentially catching some of the glow from the spotlight on
Forget the wall at 4.25% for
today. For the first time in almost a
month, we’re closer to the left side of the following chart in terms of average
- BESTEXECUTION 30YR FIXED – solidly 4.0 for many scenarios, some 3.875%
- FHA/VA –
- 15 YEAR FIXED
– 3.375%, still some 3.5’s
- 5 YEAR ARMS – low
3% range, huge variations from lender to lender.
Today’s Guidance: Rates this low make lock/float decisions much less
difficult. The lower rates go right now, the more
aggressively we’d lean toward locking.
Lock at 4.125-4.0 yesterday?
Great call. Lock at 4.0 – 3.875
today? Great call. If Best-Execution hits 3.875% firmly with
glimpses of 3.75% as it has only a few other times in the past, we literally
can think of no reason to float at that point for anyone that needs or wants to
refinance. The lower rates go, the more
we’ll see resistance to further improvements and the more the risk outweighs
the potential reward.