Mortgage Rates bounced slightly higher for the first time in more than a week today, thus remaining in limbo near the highest levels in more than 4 months. On a positive note, recent movements have been small, with no change to the prevailing note rates of 3.5-3.625% on top tier conventional 30yr fixed scenarios. That means the deterioration is seen in the form of modestly higher upfront costs (or lower lender credit, depending the structure of the quote).
In other words, markets haven’t moved enough for rates to rise a full 0.125%. Because mortgage rates are typically offered in .125% increments, lenders account for smaller market movement by adjusting the upfront cost/credit. Bottom line, you’d pay just a bit more to get the same rate you were quoted last week. Even then, the change is so small that some lenders didn’t even change those upfront costs from Friday’s levels.
Today’s Best-Execution Rates
- 30YR FIXED – 3.625%
- FHA/VA – 3.25-3.5%
- 15 YEAR FIXED – 2.875%
- 5 YEAR ARMS – 2.75 – 3.25% depending on the lender
Ongoing Lock/Float Considerations
- Rates have generally been trending higher since hitting all-time lows in early July
- Clearly-defined uptrends provide higher-than-average motivation to lock
- Risk-takers can try to time the dips in rates that may occur during that broader uptrend, but the reward for good timing generally isn’t worth the risk in these situations.
- We’d need to see a sustained push back toward lower rates (something that lasts more than 1-3 days) before anything less than a cautious, lock-biased approach makes sense for all but the most risk-tolerant borrowers.
- As always, please keep in mind that the rates discussed generally refer to what we’ve termed ‘best-execution‘ (that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also ‘bang-for-the-buck.’ Generally speaking, our best-execution rate tends to connote no origination or discount points–though this can vary–and tends to predict Freddie Mac’s weekly survey with high accuracy. It’s safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie’s once-a-week polling method).