Author: Editor - Finance Top Stories

Mortgage Rates Catch a Break After Last Week’s Rout

Mortgage rates had a bad week last week, quickly rising to the highest levels in months.  To make matters more frustrating, there weren’t any clearly-delineated reasons for the rate spike.  Making sense of the movement required a dive into the esoteric conversation about the year-end bond trading environment.  That esoteric conversation is still the only way to make sense of today’s movement, but this time around, the move is in our favor.  What had been an abrupt, inexplicable spike higher last week has now been largely undone by an abrupt, inexplicable move lower today.  Rates were only modestly lower this morning, but as underlying bond markets rallied more aggressively, most lenders issued updated rate sheets this afternoon.  Borrowers who had seen top tier rates move up an eighth of a percentage point (.125%) from 4.0% to 4.125% are once again seeing 4.0% after today’s improvement.  Lenders who didn’t reprice today would likely pass along the gains tomorrow morning, as long as bond markets hold relatively steady. Today’s Most Prevalent Rates 30YR FIXED – 4.0%-4.125% FHA/VA – 3.75%  15 YEAR FIXED – 3.375%-3.5% 5 YEAR ARMS –  2.75 – 3.25% depending on the lender Ongoing Lock/Float Considerations 2017 had proven to be a relatively good year for mortgage rates despite widespread expectations for a stronger push higher after the presidential election in late 2016.  While rates remain low in absolute terms, they’ve...

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Mortgage Rates Seasonally Sideways

Mortgage rates were lifeless today as financial markets drifted sideways.  Although rates CAN move during the last week of December when there’s an imbalance between buyers and sellers in bond markets, that’s the exception to the rule.  We tend to see days exactly like today with effectively zero change in lender rates sheets compared to the previous business day (in this case, last Friday).  In the bigger picture, it’s reassuring to see rates hold sideways after they spiked early last week.  That said, the sideways momentum is best viewed as symptom of the season.  We’ll know a lot more about underlying momentum in rates by the 2nd week of January.  Between now and then, there’s limited risk and limited reward when it comes to floating vs locking.   Today’s Most Prevalent Rates 30YR FIXED – 4.125% FHA/VA – 3.75%  15 YEAR FIXED – 3.375%-3.5% 5 YEAR ARMS –  2.75 – 3.25% depending on the lender Ongoing Lock/Float Considerations 2017 had proven to be a relatively good year for mortgage rates despite widespread expectations for a stronger push higher after the presidential election in late 2016.  While rates remain low in absolute terms, they’ve moved higher in a more threatening way heading into the 4th quarter, relative to the stability and improvement seen earlier in 2017 The default stance for now is that this trend toward higher rates has the potential to continue. ...

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Mortgage Rates Barely Budge as Markets Head Home For Holidays

Mortgage rates didn’t move much today, which is a victory unto itself on a week with 3 of the worse consecutive days of the year.  In fact, lenders that changed rates at all today generally offered slight improvements in terms of upfront costs.  In other words, quoted rates remained unchanged, but some lenders slightly decreased the costs associated with those rates (or increased the available lender credit) by a fraction of a point. Despite the presence of several economic reports that would typically have some impact on intraday rate movements, bond markets were stone silent today–a reflection of the impending holiday weekend.  Lenders will of course be closed on Monday for Christmas.  In the shortened week that follows, lenders tend to play things fairly conservatively, meaning risk and reward for floating are both muted (risk is muted because the conservative strategies are already in place). Loan Originator Perspective Enjoy the holiday weekend, and float. Besides losing a few days on your lock with the weekend, and holiday, today is an early market close, and the markets have checked out for the weekend. Watch again on Tuesday, though we still may see a quiet week. –Ira Selwin – VP of Capital Markets at US Mortgage Corporation It was a predictably slow day in bond markets Friday, as prices eased up slightly.  While we haven’t lost further ground the last two days, we’re...

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Worst Week Since June May be Calming Down For Mortgage Rates

Mortgage rates edged just slightly higher again today, capping the sharpest 3-day increase since late June and leaving the average lender more than an eighth of a percentage point higher than they were on Monday.  While an eighth of a point may have been a fairly typical “big week” in previous years, it’s been uncommon in 2017–especially since the range of rates began to narrow at the end of October.  Today’s weakness in mortgage rates–although small–is at odds with slight improvements in bond markets (which underlie rates).  Part of the reason is timing.  Bonds weakened into the afternoon yesterday, but few lenders adjusted rate sheets accordingly.  That means they began today at a relative disadvantage–one that’s reflected in the rate sheet changes. The average lender is now quoting conventional 30yr fixe rates of 4.125% compared to 4.0% on Monday.  The underlying improvements in bond markets suggest that the worst may be over for this week’s rate spike, but it still makes more sense to be cautious as opposed to aggressive with respect to locking and floating.  In any event, tomorrow is only a half-day for bond markets, meaning rate sheets will err on the conservative side (i.e. lenders won’t be eager to offer significantly lower rates).  Bond markets and mortgage lenders are, of course, close on Monday for Christmas. Loan Originator Perspective Bond markets were fairly flat today, but the damage...

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Mortgage Rates Highest Since Late October

Mortgage rates continued higher today, largely due to momentum in bond markets (which dictate rates) carrying over from yesterday.  Trading was far less active today and the movement was much smaller.  Even so, any amount of additional weakness would have been enough to confirm a shift in what had been an exceptionally flat rate range over the past 3 months. The average lender has moved an eighth of percentage point (.125%) higher in rate over the past 2 days, leaving them right in line with late October’s levels.  Unfortunately late October marked a brief period of highs rates, and you’d have to go back to early July to see anything similar.  On a final, downbeat note, we haven’t seen conclusively higher rates since May 2017. As we discussed yesterday, bond markets are making these moves for their own reasons, without regard for the Tax bill that passed it’s re-vote in the House today (and the Senate’s first and only vote overnight).  To be clear, the tax bill has been a big deal for rates–just not over the past 2 days.  The fact that its passage aligns with market volatility is utter coincidence.  There’s always a bit of uncertainty when it comes to market movement in the 2nd half of December.  Markets won’t really be firing on all cylinders until the 2nd week of January.  All we can know for now is...

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