Mortgage Rates Improve For First Time in October

By: Matthew Graham •

Domestic economic data and the exuberance over the European debt situation were both fairly lackluster today, and  Mortgage Rates improved decisively for the first time October.

The 30yr Fixed Best-Execution rate fell an eighth of a point at most lenders, though the volatility continues to lead to a wider-than-normal variety among lenders.

Despite the improvement, if you're seeing local or national news talking about rates in the "high 3's," that info is already out-dated as Best-Execution rates are now solidly back in the 4's.   To that end, thankfully, Freddie Mac is out with this week's Primary Mortgage Market Survey, showing average rates back up to 4.12.

Today's Rates: 

  • BESTEXECUTION 30YR FIXED -   4.125%, variation between lenders
  • FHA/VA - 3.75%, Still plenty of 3.875's
  • 15 YEAR FIXED -  3.375 or 3.5% depending on lender
  • 5 YEAR ARMS -  low to mid 3% range, variations from lender to lender.

Ongoing Guidance At 4.25% Best-Execution Levels: you can approach the upcoming days in one of two ways: either rates will continue higher, and the general range of rates would be 4.25-4.75% in terms of Best-Execution, OR we've hit a wall of sorts, and can either bounce lower or hold steady.  The more days you wait to determine this, the more money you'll lose if the first scenario plays out and the more you'd gain if the second scenario plays out.  If rates don't look like they're holding steady or improving by the end of this week, we'd be locking everything (and fairly close to that sentiment already, but feel it's at least one day too soon to say for sure).

 See Rates from Lenders in Your Area

New Guidance: Yesterday we talked about being close to 4.25% and potentially locking at a loss if things worsened today.  But now that things have improved, what do you do if you picked up an eighth of a percent improvement in rate?  Just like the spectrum would suggest in the graphic below, you'd definitely be leaning more toward locking at the 4.125 level, but not unequivocally so.  If you don't mind putting the eighth you just gained back at risk for the chance to go down another eighth, tomorrow will be an informative day as to how optimistic we'll be about further improvements.