Lowest Mortgage Rates Since Late February

After
closing out the previous week with slight gains Mortgages Rates have done the same to begin the current
week.  On average, this brings rates to
their best levels since late February,
however, rates were in similar territory on Tuesday 4/10.  The late February levels in question
contained all time mortgage rate lows.

Any
time we talk about “lows” or “best levels,” it’s important to keep in mind that we’re constantly assessing BOTH the
interest rates AND the costs associated with them.  In actuality, the interest rate you’d be
quoted today may very well not be different from what you would have been
quoted on Friday, although the lender’s costs are likely somewhat lower. 

The
consideration of both RATES and COSTS is central to our determination
of a “Best-Execution” rate, which
can generally be thought of as the most efficient combination of payment vs.
costs.  Today, the Best-Execution rate
for 30yr Fixed Conventional Loans remains at 4.0% for many scenarios and is
increasingly available at 3.875% for some scenarios.

 (read more about Best-Execution calculations).  

Last
week we noted a relatively indecisive
attitude in
the markets that underlie mortgage rate movements.  From Friday’s commentary:

We’re generally viewing next week as relatively inconsequential in the big picture given that the following week includes the
next FOMC Announcement (you know… where the Fed puts out their official
statement every month and a half or so…).  We could certainly see some
level of improvement or deterioration in mortgage rates, but there’s greater potential
for bigger moves in the following week.  Keep in mind that “less
volatile” and “less consequential” don’t connote an absence of
risk.  Unexpected market-moving headlines can happen any time.

This
was evident today as markets reacted
more
to general concerns over the Spanish debt situation (some point to
Spain as the next Greece) than to the stronger-than-expected Retail Sales
report out this morning. 

Once
again, we want to be very careful about making any sort of assumption of
stability in financial markets.  There’s no way to guarantee that this will continue
to be the case
this week.  Whatever
happens though, it does seem increasingly possible that markets are most
focused on next week’s FOMC, while still keeping an eye out for European
concerns and to a lesser extent, any major surprises in this week’s economic
data. 

Today’s BEST-EXECUTION Rates 

  • 30YR
    FIXED – 
     3.875%-4.0%
  • FHA/VA -3.75%
  • 15
    YEAR FIXED
     –  3.125-3.25%
  • 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
  • We’ve recently spent time further
    away from the very best levels of the past few months having broken
    away from a long, stable trend.
  • That led us to expect greater
    volatility, and indeed we got it!
  • But now that volatility MIGHT
    be depositing us back in a sideways range near all-time lows
  • Rates could easily move higher
    or lower, but given the nearness to all time lows, there’s generally more
    risk than reward regarding floating
  • (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).

 

 

 

…(read more)

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