Mortgage Rates Begin July At New All Time Lows

Mortgage Rates improved moderately today bringing them just barely into new all-time low territory.  Some lenders released 2nd and even 3rd rate sheets today with improved pricing and the 3.625% Best-Execution level is beginning to looks more and more like it will share the stage with 3.5% if current pricing is maintained.  For now, 3.625% is still dominant, but some of the more aggressive lenders are arguably at 3.5% for Conventional 30yr Fixed Best-Execution.

(Read More:What is A Best-Execution Mortgage Rate?)

Pricing improvements came today partly due to bond markets holding slight gains versus Friday’s latest levels.  MBS (the mortgage-backed-securities that most directly influence lenders’ rate sheets) are part of bond market and normally trade in the same direction as US Treasuries though often by varying degrees.  Today was no exception with a fairly calm and mildly positive morning (positive = slightly lower in yield or rate).  

The calm was interrupted for markets to react to a much weaker-than-expected report on the Manufacturing sector that showed the first instance of shrinking activity since July 2009.  Bond markets took all off a few short minutes to dash lower in yield, but again resumed their calm, sideways patterns after the adjustment.  The report was the most significant piece of economic data until after markets return from a day off on the 4th.

However abrupt the market movement may have been after the report, it’s important to note that it was consistent with the ongoing theme that we began to reiterate last week, which is this: 

“we’re feeling less and less like rates are cutting this narrow, converging path because they’re ready to break quickly to one direction or another and more like rates are just really low, really sideways, and will take a lot of convincing before doing something else.  In other words, we’re planning on “low and sideways” around current levels until something big happens to change that.  All we can do is watch and wait for such things and keep an eye out for upcoming candidates to motivate the potential movement.  

Unless something carries us out of this low, narrow range before then, we’re only feeling especially defensive about the Employment Situation Report on Friday morning.  If rates are at or near all-time lows on Thursday afternoon, it would be hard to advocated doing something other than locking those in.  

Long Term Guidance: We’d continue to advocate against trying to “get ahead” of current market movements due to the high degree of uncertainty.  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 can change quickly based on events that aren’t “scheduled” or able to be forecast.  Risk vs reward for floating vs locking looks a bit larger than we’d like, but not out of the question for those who understand the risks and have an exit strategy if things don’t go their way.

Loan Originator Perspectives

Ted Rood, Senior Mortgage Consultant, Wintrust Mortgage

Mortgage rates continue to drop, and today is no exception. I’m using the improved rates to cover even more of my clients’ closing costs and escrows. My borrowers and I always have the “lowest rate is not necessarily the best deal for you” conversation early in the loan process. If an 1/8th higher rate saves us thousands in closing costs, it’s often the prudent move, especially with rates as ridiculously low as they are.

Jeff Statz, Network Funding L.P.

There is still much to discover for news and data this week, but if your closing is around the corner, locking is a safe bet today.

Victor Burek at Benchmark Mortgage

If you floated over the weekend, you were rewarded with great rates this morning. If within 15 days of closing, go ahead and lock…everyone else should continue riding the float boat.


  • 30YR FIXED –  3.625%
  • FHA/VA -3.5% – 3.75%
  • 15 YEAR FIXED –  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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David H. Stevens Staying at MBA

Slightly more than a month after it confirmed
he was leaving his post as President and CEO, the Mortgage Bankers Association
(MBA) announced that David H. Stevens would remain at the head of the trade
association.  Steven’s resignation and
appointment as president of Sun Trust Mortgage was announced by both MBA and
the parent company of his new employer, Sun Trust Bank, on May 30.  The announcement came almost simultaneous
with Steven’s first year anniversary with MBA.

In a statement released this morning MBA
said they were pleased to announce that Stevens “has agreed to stay on as
President and CEO.”  MBA Chairman Michael
W. Young said that, “Over the past several
weeks, MBA’s leadership, members and staff impressed upon Dave the important
role he was playing for the industry and his unique qualifications to lead the
association.  The importance and
significance of MBA’s voice during this critical time coupled with Dave’s
experience and talents encouraged us to do all we could to retain him.”

“The past few weeks have been extremely
difficult for me personally and professionally,” Stevens said.  “After serious thought and consideration, I
simply cannot leave the MBA at such a critical time for the industry and the
association.  Frankly, at the end of the
day, stepping away now when so much progress is being made and so much still
left to be done, did not feel right.

through this experience left me encouraged by the tremendous opportunity that
lies within our industry and reinforced the essential component mortgage
finance will continue to play in helping our nation’s economy recover.” he

Stevens joined MBA in May 2011 after serving as Assistant
Secretary of Housing and Urban Development and Commissioner of the Federal
Housing Administration (FHA). 

Mr. Stevens was to have joined the Company on July 16, reporting to SunTrust Mortgage President and CEO Jerome Lienhard.

“We have a strong leadership team in place, and continue to execute our business plan and serve the needs of the clients of SunTrust Mortgage,” said Mr. Lienhard.

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CoreLogic: Home Prices Show Third Consecutive Monthly Increase

Home prices were up for the third
consecutive month
in May as measured by CoreLogic’s Home Price Index
(HPI.)  The three months of increases were
noted for both annual and month-over-month numbers.

The HPI increased by 1.8 percent
compared to April figures and was 2.0 percent higher in May 2012 than in May
2011.  Those numbers are for all home
sales including those of distressed homes, both short sales and real estate
owned (REO) transactions.

When distressed sales are removed from
the calculation home prices were up year-over-year by 2.7 percent and were 2.3
percent higher in May than in April. 
This is the fourth consecutive month-over-month increase.

CoreLogic’s forward-looking Pending HPI
which is based on Multiple Listing Service data measuring price changes in the
most recent month indicates that house prices, including distressed sales, will
rise by at least 1.4 percent from May to June and by 2.0 percent if distressed
sales are not included.

“The recent upward trend in
U.S. home prices is an encouraging signal that we may be seeing a bottoming of
the housing down cycle,” said Anand Nallathambi, president and chief
executive officer of CoreLogic. “Tighter inventory is contributing to
broad, but modest, price gains nationwide and more significant gains in the
harder-hit markets, like Phoenix.”

“Home price appreciation in the
lower-priced segment of the market is rebounding more quickly than in the upper
end,” said Mark Fleming, chief economist for CoreLogic. “Home prices
below 75 percent of the national median increased 5.7 percent from a year ago,
compared to only a 1.8 percent increase for prices 125 percent or more of the

Since home prices peaked in April
2006 the national HPI including all sales has fallen 30.1 percent and non-distressed
sale prices are down 22.2 percent.

The highest price appreciation
including distressed sales was seen in Arizona (12.0 percent), Idaho (9.2
percent) and South Dakota (8.7 percent). 
When distressed sales are excluded the greatest appreciation was noted
in Montana (9.1 percent), South Dakota (8.5 percent), and Arizona (7.3

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Along With the Larstrand, Pricey Rentals Rise on the Upper West Side

The Larstrand is expected to be completed by the end of next year, joining two other high-priced luxury rentals in the neighborhood.