Mortgage Rates Edge Closer To All-Time Lows

By: Matthew Graham •

Mortgages Rates are moderately improved to begin the week, taking them slightly lower than than April's best two days (4/10 and 4/23) and as close as they've been to all-time lows in several months. This further solidifies the Conventional 30yr Fixed Best-Execution Rate at 3.875%, which had recently shared the stage with 4.0%.

Keep in mind that "best-execution" as we calculate it, connotes the no-closing-cost rate for the best-qualified borrowers in the most ideal scenario.  (read more about Best-Execution calculations).  If your scenario is something less than flawless, and you were looking at a 4.0% rate on Friday, there's a chance that 3.875% will be doable today.  That said, 3.875% today is still a more expensive rate than 4.0% was on Friday any way you slice it.  In other words, 3.875% is still going to require more closing costs (or less lender-credit toward closing costs) than 4.0% did on Friday. 

 See Rates from Lenders in Your Area

Despite the improvements in rate sheets today, the broader markets were strikingly flat yet again.  Lots of market participants are out of the office this week for various holidays in Europe and Asia.  Believe it or not, such things do, in fact, have an effect on how busy our domestic trading sessions can be.

We'd expect the level of market activity to pick up as the week progresses, but certainly Friday is the most important day.  Whereas we might see some small movement in either direction throughout the week, things can change abruptly on Friday with the release of The Employment Situation Report.  The fact that rates have been so low and so stable is a negative risk in our view.

 Historically, there's been limited benefit in floating at current levels, and historically, "big news" that follows "flat markets" creates the potential for huge swings.  This is not at all to say that rates couldn't or wouldn't improved if the Jobs report was very weak, simply that there's no historical precedent to them improving much beyond current levels and that the Jobs report creates the potential for volatility.  

Today's BEST-EXECUTION Rates 

  • 30YR FIXED -  3.875%
  • FHA/VA -3.75%
  • 15 YEAR FIXED -  3.125-3.25%
  • 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
  • Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
  • But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.
  • (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).