Mortgage Rates: Sending A Message

Interest Rates

Building on Friday’s late day comeback, news out of Europe helped US Bond
Markets (Including the Secondary Mortgage Market) to walk in the door in
rally-mode this week.  That resulted in noticeable improvements to average Mortgage
(see “Current Market” for more details).

CURRENT MARKET (NEW)*: The BestExecution
30-year fixed mortgage rate is BACK
at 4.125%
after having been
between there 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

GUIDANCE (NEW): It seems like the mortgage market is sending a clear message
 Not only are rates solidly
lower, but the secondary mortgage market has rallied about as much as we’ve
seen it rally lately.  Combine this
phenomenon of “running out of steam” with the upcoming high risk event of
Wednesday’s FOMC (sprinkle in the fact that the rally iself is driven by
overseas headlines, and those continue to create a risk of unexpected movements
in the short term) and it seems like all the stars are aligning to suggest locking this afternoon is the highest
probability bet.
 All that
notwithstanding,  we continue to favor
locking due to the nearness to all-time lows. 
(Counterpoint: we are a bit suspicious any time something looks like
such a “sure thing” when it comes to financial markets.  This tempers today’s stance a bit).


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