The bigger reaction to events in
Europe over the past two days sent Mortgage Rates higher today, now at the edge
of the recent range.
Whereas lender offerings were more
stratified yesterday, as rates get pushed up to the wall at 4.25%, the
variability has subsided somewhat.
- BESTEXECUTION 30YR FIXED – 4.25%
- FHA/VA –
3.875% – 4.0%
- 15 YEAR FIXED
– 3.625%, some 3.5%
- 5 YEAR ARMS – low
3% range, huge variations from lender to lender.
Yesterday’s Guidance (but a good
read today): Unfortunately the
“scariness” associated with events in Europe isn’t quite over yet in
terms of the volatility it could cause for mortgage rates. There’s more
Euro-drama that could yet unfold, and the additional layer of risk from
domestic economic data tomorrow and Friday. We still feel optimistic
about 4.25%’s ongoing ability to stick around, but the volatility is still
scary enough to favor locking even though we’d probably be feeling more floaty
without that volatility in place. The possibility that rates get lower in
spite of the increased disposition to lock is part of the frustration of
dealing with volatility. But better safe than sorry.
Today’s Guidance: Hey…
at least if you locked yesterday you don’t have to worry about that frustration
mentioned above of locking right before rates move lower! But on the other hand, there’s that other
kind of frustration that comes from floating and seeing rates move higher. If you find yourself in that boat today, be
aware that there are more high-risk events ahead and that even if markets are
active tomorrow, lenders may not move rates much ahead of next week’s packed
schedule of economic data. Rarely do we
get a Fed Rate Decisions (FOMC Announcement) and an Employment Situation Report
in the same week, but both are on the horizon next week. Yes, we’re still impressed with 4.25% holding
as Best-Ex and still optimistic that it can continue (maybe even more
optimistic than we were), but IF things move in the wrong direction, that could
quickly get more painful than the benefits that could be realized by floating
in the short term.
(Keep in mind, if a scenario is
anything other than flawless in every way, a note rate can certainly be over
4.25% these days. Read the disclaimer at the bottom of the post if you
need more clarification).