After two days of significant
Rates took a measured step back on Friday.
Best-Execution rates rose about an eighth of a point. The
trend continued today, although in slightly less dramatic fashion.
merely a slightly negative day for rates.
There wasn’t much to drive trade on the secondary market and traders are
likely waiting to see how this week’s Treasury auctions pan out (Treasuries are
related to MBS, but MBS or “mortgage backed securities” are the true drivers of
changes in mortgage rates) as well as the upcoming kick-off of the Fed’s
return to scheduled participation in the MBS Market.
(temporary caveat that we’ll
probably repeat a few more times): Please keep in mind that lenders simply
cannot move mortgage rates lower at the same pace as a rapid rally in Benchmark
Treasuries. Although you might hear talking heads on TV or read
articles saying that mortgage rates are tied to Treasuries, THEY ARE NOT,
and you’ll be perennially frustrated if you expect them to be. We
explained that in greater detail earlier in the month:(Why
aren’t rates getting lower as fast as Treasuries).
- BESTEXECUTION 30YR FIXED – rates edged up to
straddle 3.875% and 4.0% today, with a higher than normal degree of variation
- FHA/VA – still at
- 15 YEAR FIXED
Some will still be best priced at 3.25%, but 3.375% is back in the
- 5 YEAR ARMS – remain near 3.125%, but with variations from
lender to lender.
GUIDANCE: Going back and reviewing the recent RateWatch posts, it
seems like it would be hard to be much more in favor of locking. So we’ll assume you’ve heard that if you’ve
been following and know how to go back and check what’s been said previously if
you so desire. Bottom line, rates are
still historically low. Locking is still
the default guidance and preference.
That said, if you’re in a situation where your quoted rate just moved up
an eighth (from 3.875% to 4.0% for instance), talk to your mortgage pro to see
how much worse markets would need to get before you’d be moving up again (to
4.125% for instance). Chances are, you’re
closer to falling back down to the lower rate if you just got nudged higher
today. If you can afford to take such
risks, and are perfectly fine with paying extra closing costs should the market
move against you, you might wait to see if you can get back down to where you
were on Friday. Just a thought, and not
one I particularly endorse, but there are only so many ways to say “you should
lock,” before it’s time to say something else.