Mortgage Rates Begin Week Flat to Slightly Improved

By: Matthew Graham •

Mortgages Rates finished out the previous week in positive fashion, logging three straight days of minor improvements after beginning the week poorly.  This week begins on a much calmer note with rates mostly steady compared to Friday and very slightly improved in some cases.  The improvements haven't been enough to change the Best-Execution landscape much, if at all.  Rather, the gains are more readily seen in the form of slightly lower closing costs for the same rates that prevailed on Friday.  

Additional reading: Previous post with more detailed discussion about Best-Execution calculations. 

In terms of market factors driving interest rates today, things were extremely quiet.  The rest of the week will be fairly busy in terms of economic data and events, so today feels like sort of a warm-up for the busier days ahead.  US Treasuries (a broad indicator of the overall interest rate environment) and MBS (the mortgage-backed-securities that most directly influence lenders' rate sheets) both held steady ranges throughout the day.  The central 3 days of the week will be the busiest in terms of events on the calendar. 

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We'd probably feel a bit more defensive if underlying MBS prices don't improve much tomorrow as they've been on a fence between the better levels of mid-to-late January and recently lower levels seen through most of February.  The fact that rate sheets haven't made even more of a push into 3.875% Best-Execution territory goes hand in hand with the indecisive levels of underlying MBS.  Fortunately, tomorrow's session should be more informative than today's in assessing how this will play out.

Today's BEST-EXECUTION Rates

  • 30YR FIXED -  3.875% back in control.  Some 4.0%
  • FHA/VA -3.75%
  • 15 YEAR FIXED -  3.25%, more 3.125% availability
  • 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).