Back Against The Wall for Mortgage Rates

By: Matthew Graham •

The bigger reaction to events in Europe over the past two days sent  Mortgage Rates higher today, now at the edge of the recent range. 

Whereas lender offerings were more stratified yesterday, as rates get pushed up to the wall at 4.25%, the variability has subsided somewhat.

 

Today's Rates: 

  • BESTEXECUTION 30YR FIXED -   4.25%  
  • FHA/VA - 3.875% - 4.0%
  • 15 YEAR FIXED -  3.625%, some 3.5%
  • 5 YEAR ARMS -  low 3% range, huge variations from lender to lender.

Yesterday's Guidance (but a good read today): Unfortunately the "scariness" associated with events in Europe isn't quite over yet in terms of the volatility it could cause for mortgage rates.  There's more Euro-drama that could yet unfold, and the additional layer of risk from domestic economic data tomorrow and Friday.  We still feel optimistic about 4.25%'s ongoing ability to stick around, but the volatility is still scary enough to favor locking even though we'd probably be feeling more floaty without that volatility in place.  The possibility that rates get lower in spite of the increased disposition to lock is part of the frustration of  dealing with volatility.  But better safe than sorry. 

 See Rates from Lenders in Your Area

Today's Guidance: Hey... at least if you locked yesterday you don't have to worry about that frustration mentioned above of locking right before rates move lower!  But on the other hand, there's that other kind of frustration that comes from floating and seeing rates move higher.  If you find yourself in that boat today, be aware that there are more high-risk events ahead and that even if markets are active tomorrow, lenders may not move rates much ahead of next week's packed schedule of economic data.  Rarely do we get a Fed Rate Decisions (FOMC Announcement) and an Employment Situation Report in the same week, but both are on the horizon next week.  Yes, we're still impressed with 4.25% holding as Best-Ex and still optimistic that it can continue (maybe even more optimistic than we were), but IF things move in the wrong direction, that could quickly get more painful than the benefits that could be realized by floating in the short term. 

(Keep in mind, if a scenario is anything other than flawless in every way, a note rate can certainly be over 4.25% these days.  Read the disclaimer at the bottom of the post if you need more clarification).