Mortgage Rates improved today, gaining back a good portion of yesterday’s losses as European markets continued keeping pressure on domestic stock prices and interest rates. The biggest move for markets came on the news that Euro-zone officials agreed that member countries should be working on contingency plans for a Greek Euro-zone exit. Although the news was batted around as credible and untrue alternately, markets didn’t seem to care. The Euro hit a multi-year low and 10yr yields fell to their lowest levels in nearly a week.
Yesterday we noted that, despite rising rates, the recent weakness till fit within the scope of a ‘leveling off’ but that if rates continued rising today that could start to change. Thankfully, today’s improvements keep us well within the original ‘leveling off’ theme. That means the borrowing costs moved lower in most cases keeping the Best-Execution Rate for 30yr Fixed Conventional Loans remains at 3.75% for most lenders.
(Read More: What is A Best-Execution Mortgage Rate? )
We’d continue to advocate not trying to “get ahead” of current market movements as a high degree of uncertainty is pervasive. While it’s a reasonably safe assumption that European concerns will generally help rates stay lower than they otherwise would be, that “otherwise would be” part is very much a moving target. Best bet is to focus on the fact that rates are at their all time lows, and with very close to their all-time low borrowing costs. Add in the fact that progress has always been increasingly difficult from current levels and risk vs reward for floating vs locking looks a bit larger than we’d like.
(Get Caught Up With: Yesterday’s Post)
Loan Originator Perspective With Rates At All Time Lows
Jason York, Vice President of VA Operations at Prime Mortgage Lending, Inc
Well, we aren’t as high as we were on Monday, but we aren’t as low as we were on Tuesday. Depending on how tight your deal is, I wouldn’t blame anyone for locking in today’s gains after yesterday’s losses. If you have a little more time, I don’t think all is lost if you decided to float a little longer.
Mike Owens, Partner with HorizonFinancial, Inc.
I’m locking everything. plain and simple.
Bon Van Gilder, Finance One
Rates continue to be in record low territory. If you have an inkling to refinance/purchase— this is “Opportunity” knocking! Consult a friend for a referral to the Originator of choice. Be patient and you will gain tremendous benefit.
Constantine Floropolous, Quontic Bank
The current trend in both MBS price and treasury yield action has been extremely bullish. As much as we would like to tell our clients rates will get better, the truth is that the risk on the other side of the pendulum is too great. My personal opinion is that if you have the stomach for it, all you need is a sneeze out of the Eurozone and we can see another leg down, but the question is with mortgages lagging Treasuries, even if there is a flight to safety and treasury yields move lower, it does not guarantee that mortgage rates will follow. Conversely, mortgages should tend to hold up better if interest rates in bond markets start rising.
Jason Zimmer, Parlay Mortgage and Property
With rates remaining at all time lows, my advice to all clients closing within 60 days is to lock in your rate and enjoy the savings.
Julian Hebron Branch Manager, Loan Agent, RPM Mortgage
Greek exit and the broader eurozone contagion it would cause rode over better U.S. housing data today. It validates a theme I’ve had going into summer: that if consumers can take some short term rate spikes, the medium-term outlook is near current record levels and possibly slightly lower at different trading intervals (just be alert: the true lows are here and gone in minutes each trading day).
Today’s BEST-EXECUTION Rates
- 30YR FIXED – 3.75%
- FHA/VA -3.75%
- 15 YEAR FIXED – 3.125 edging down to 3.00%
- 5 YEAR ARMS - 2.625-3. 25% depending on the lender
Ongoing Lock/Float Considerations
- Rates and costs continue to operate near all time best levels
- Current levels have experienced increasing resistance in improving much from here
- Rates could easily move higher or lower, but given the nearness to all time lows, there’s generally more risk than reward regarding floating
- But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn’t always mean they’re done improving.
- (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario. There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you’re following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).
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