continued to improve today, adding on to yesterday’s already impressive gains. Best-Ex moved solidly down to lower of the
two rates it had been straddling.
That brings mortgage rates back even
with or within an eighth of all time lows (depending on your scenario). And with the Fed set to begin a new round of
MBS (Mortgage-Backed-Securities) buying on Monday, AND with month/quarter-end
trading factors out of the way, there’s a good chance that we’ll see more all
time lows in the coming weeks.
- BESTEXECUTION 30YR FIXED – Firmly 3.875%
- FHA/VA –
still at 3.75% !!
- 15 YEAR FIXED
– 3.375%, 3.25% getting closer to viable
- 5 YEAR ARMS – low
to mid 3% range, variations from lender to lender.
GUIDANCE: Today’s gains bring rates back down to the lower end of
their expected range. Think of that
range as having 4 levels. When the
cream-of-the-crop best-execution rate is as 4.125, the range is on one end of
the spectrum, and when Best-Ex is at 3.75, that’s the other end. 3.875 and 4.0 are the two rates in between
for a total of 4 available rates in this range.
Keep in mind that your quoted rate could be different depending on your
scenario, but in terms of Best-Execution rates for the best qualified
scenarios, this is the range. So being
at 3.875 is like being 3/4’s of the way to “as good as it gets,” Whereas
yesterday at 2/4 would be more of a toss up.
If you’ve noted our tone recently shifting to be slightly more tolerant
of floating, and you floated for the past few days, now it’s time to lock in
those gains from a risk-reward standpoint.
We lean more heavily toward locking when Best-Ex is under 4.0 these
days. While we’re optimistic that there
are a few more gains in store for MBS with the beginning of new Fed Buying, we’d
hate to see 3.875 unexpectedly evaporate on some surprise headline out of
Europe or turning point in economic data.