Mortgage Rates: Sending A Message

Building on Friday's late day comeback, news out of Europe helped US Bond Markets (Including the Secondary Mortgage Market) to walk in the door in rally-mode this week.  That resulted in noticeable improvements to average Mortgage Rates (see "Current Market" for more details).

CURRENT MARKET (NEW)*: The BestExecution 30-year fixed mortgage rate is BACK at 4.125% after having been between there and 4.25%.  Several lenders are willing to offer lower rates, but in most cases, those quotes carry additional closing costs.  On FHA/VA 30 year fixed BestExecution  is straddling  3.875% and 3.75% (no change).  Deals can be structured with lower rates, but again, you'll pay more for those, so make sure you assess the time it takes to break-even on the extra expense.  15 year fixed conventional loans are best priced at 3.375% (no change). Five year ARMs are best priced at 3.125% (no change).  Please note there can be a fair amount of variety between lenders and that this has been exaggerated by recent market volatility.

GUIDANCE (NEW): It seems like the mortgage market is sending a clear message today.  Not only are rates solidly lower, but the secondary mortgage market has rallied about as much as we've seen it rally lately.  Combine this phenomenon of "running out of steam" with the upcoming high risk event of Wednesday's FOMC (sprinkle in the fact that the rally iself is driven by overseas headlines, and those continue to create a risk of unexpected movements in the short term) and it seems like all the stars are aligning to suggest locking this afternoon is the highest probability bet.  All that notwithstanding,  we continue to favor locking due to the nearness to all-time lows.  (Counterpoint: we are a bit suspicious any time something looks like such a "sure thing" when it comes to financial markets.  This tempers today's stance a bit).