For the second day in a row, Mortgages Rates
are just slightly better than unchanged. Best-Execution
remains at 3.875% for conventional 30yr fixed loans, and the slight
improvements seen today have benefited the borrowing costs required to
obtain those rates. (learn more
about how we calculate Best-Execution in THIS POST). Also in the same vein as yesterday, the stratification between lender offerings continues to lessen, and the improvement in our measurement of rates today reflects that consolidation more than a broad-based movement down in rate. That said, 3.75% got a bit closer to vying for the Best-Execution crown.
The similarities to yesterday keep on coming… MBS (the “mortgage-backed securities” that most
directly affect mortgage rates) pressed further into all-time highs today, almost like a runner in baseball taking a “lead-off.” In this game, MBS are possibly waiting to find out whether or not tomorrow’s important jobs data is “a hit.” If it’s weaker than expected, and by a significant enough margin to matter, interest could move lower based on their historical tendencies. In that case, MBS would be well-positioned to steal the next base, thus helping to make the case for a 3.75% best-execution level. But if the jobs report is stronger than expected, MBS could simply move right back to the safety of their base and wait for the next pitch. In this case, the “base” would be the 3.875% best-execution rate for cream-of-the-crop 30yr fixed loans.
Now, it’s important to keep in mind that markets frequently buck historical trends, in essence, acting opposite the expectation. So that’s another possibility for tomorrow, as well as the less-fun-to-imagine chance that MBS get “tagged out” before getting back to base. It’s hard to imagine a runner that has been as strong and consistent as mortgage-rates have recently been, being dealt a major set-back, but it pays to be ready for anything. To that end, and without any bias toward what might happen tomorrow, few if any savvy market watchers would find fault in locking an interest rate the day before an influential piece of economic data, when MBS have just traded to their all-time highs. Some folks might prefer a riskier stance in the hopes of a rate-friendly jobs report tomorrow or some other future chance at a lower rate, but if you’re inclined to lock and/or have been on a fence, it’s about as good a time as we’ve seen considering the circumstances.
Today’s BEST-EXECUTION Rates
- 30YR FIXED – 3.875% mostly, increasing presence at 3.75%
- FHA/VA -3.75%
- 15 YEAR FIXED – 3.25%, some lenders venturing lower, some completely stuck at 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
- 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).