Mortgage Rates Able to Inch Slightly Closer to All-Time Lows

By: Matthew Graham •

Mortgage Rates  improved slightly today from what were already near the best levels since early November.  We should mention though, that sounds a bit more impressive than it actually is considering there's a reasonable chance that the actual interest rate you would have been quoted between now and then never changed more than 0.125%.  Rates have just been extremely flat near all time lows.  

To put that in perspective, all time lows would be the days where the average of numerous lender's Best-Execution rates were at 3.875% and for precious few moments at 3.75%.  With today's improvements, we're closer to declaring 3.875% the dominant best execution rate than we have been since early November, but 4.0% remains widely quoted.  

Tomorrow finally brings a bit of domestic economic data, something that's been in extremely short supply as markets stew over their great expectations for Friday's EU Summit.  As we've said before, European events/headlines are our biggest market mover these days and whether it's positive or negative, there are simply a lot of opinions about what the market-based effects of the Summit might be.  It's a high-risk event and a mere day away, so with rates near all time lows, plan accordingly.  No major change to the guidance below.

 See Rates from Lenders in Your Area

Today's BEST-EXECUTION Rates

  • 30YR FIXED -  4.0%, increasing amount of 3.875's.
  • FHA/VA - 3.75%, fewer 3.875's
  • 15 YEAR FIXED -  3.375%-3.5%
  • 5 YEAR ARMS -  low 3% range, huge variations from lender to lender.

Guidance:

In a fundamental sense, we're well aware of the fact that European drama continues to help domestic bond markets.  Technically, we're impressed that mortgage rates have been this flat for this long.  With the ongoing sideways movement of Best-Execution around 4%, the chances increase that the next move will carry a bit of momentum with it (as if the current calm is akin to "storing energy").  If it goes in a mortgage rate-friendly direction, there's limited benefit (an eighth to a quarter of a point of improvement) versus the damage that could result from it going the other way.  Fortunately, neither of those eventualities appear to be happening at the moment, so it's hard to go wrong.  We'll let you know the day that changes.