Mortgage Rates Battle Back From The Edge

By: Matthew Graham •

With yesterday's increases, Mortgages Rates moved to the edge of their recently long and stable stay at a 3.875% Best-Execution level.  While some lenders are still best-priced at 4.0%, the average Best-Execution rate moved back down into 3.875% territory today.  Keep in mind that "best-execution" refers to the most ideal possible rate/fee scenario and we track this because it's the most consistent way to benchmark the movement of the broader collection of lender rate offerings.    (We explain  even more about Best-Execution calculations in THIS POST).  

The same thing that has been moving markets and mortgage rates around all week, is once again behind today's general bounce back.  Early this morning, one of the leaders of a political party in Greece said that his party could not back the bailout agreement.  The execution of this agreement was a key factor pressuring rates higher in general and it required the approval of all three of Greece's political parties.  If constant drama surrounding Greece is starting to feel repetitious to you, you're not alone.  There is yet another "important day on the calendar" next Wednesday, where Euro-zone ministers will meet again to approve the bailout package if Greece can get its ducks in a row by then.

 See Rates from Lenders in Your Area

This is a positive development for the long term trend in mortgage rates as it essentially constitutes a "bounce" against a ceiling at the upper limits of 3.875% best-execution territory.  In other words, if rates had gone any higher today, we'd have been decidedly in 4.0% territory.  3.875% is the lowest that best-execution has stably been.

Today's BEST-EXECUTION Rates

  • 30YR FIXED -  3.875%
  • FHA/VA -3.75%
  • 15 YEAR FIXED -  3.25%
  • 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
  • There are technical reasons for that as well as fundamental reasons 
  • Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
  • While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
  • But that will always be the case when rates operating near historic lows
  • (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).