Unprecedented Rally Finally Ends For Mortgage Rates.

By: Matthew Graham •

Mortgage Rates moved slightly higher today, breaking a streak that saw all-time low rates every day beginning last Friday.  The termination of this winning streak isn't particularly violent though, and still leaves rates at lower levels than any day before last Friday.  In fact, rates only move up to about the middle of the this week's range depending on the lender in question.  Even then, it's important to remember that the rates themselves aren't likely to be moving from day to day at current levels, and instead, the movement is restricted to closing costs.  In other words, if we note that "rates moved higher" today, in most cases that will mean that closing costs are slightly higher for the same Best-Execution rate that you would likely have been quoted yesterday.

(Read More:What is A Best-Execution Mortgage Rate?)

 See Rates from Lenders in Your Area

Long Term Guidance: We'd continue to advocate against trying to "get ahead" of current market movements due to the high degree of uncertainty.  While it's a reasonably safe assumption that European concerns will generally help rates stay lower than they otherwise would be, that "otherwise would be" part is very much a moving target.  Best bet is to focus on the fact that rates are at their all time lows, and can change quickly based on events that aren't "scheduled" or able to be forecast.  Risk vs reward for floating vs locking looks a bit larger than we'd like, but not out of the question for those who understand the risks and have an exit strategy if things don't go their way.

Loan Originator Perspectives

Jason York, Vice President of VA Operations at Prime Mortgage Lending, Inc

If you are purchasing a home, and are within 15-30 days of closing, then there is nothing wrong with locking in what you currently have. Sure, things could get slightly better, but they could also get worse, and things get worse a lot quicker than they get better. For a refinance, the same pretty much applies if you are within 15-30 days of closing. If you are farther out than that, then I think you would be fine to continue to float. Just make sure your LO is on top of things, and is aware of the current market situation. If they aren't watching Mortgage News Daily, then I would recommend finding a mortgage professional that is, because they obviously care about having as much knowledge as possible about their business.

Kent Mikkola, Mortgage Consultant, NMLS 353976

Do you want to risk losing these great rates? Floating can bring some reward, but better safe than sorry.

Ted Rood, Senior Mortgage Consultant, Wintrust Mortgage

If you've got a loan in progress and haven't locked yet, sure might be time to pull the trigger. Rates have come down a lot in a pretty short time, and when they go up, they rise fast (much like the price of gas). Friday afternoon often brings lender reprices for the worse, don't be surprised if they happen again today.

Constantine Floropoulos, Quontic Bank

We continue to advise clients closing in 3-4 weeks to lock their loans. Again, we feel the risk vs. reward on floating at these historically low levels just doesn't make business sense for our clientele. We additionally feel that rates will go higher, and more likely than not, will move in an aggressive nature. You can float your interest rate and gain .125%-.25% on your rate, or risk your rate moving higher by .25%-.75% in a matter of a couple weeks. We have seen this before, and we all know that history repeats itself constantly. Trying to catch a falling knife never works out!

Victor Burek, Benchmark Mortgage

Strength in stocks has only marginally worsened rate sheets this morning. I am rarely a fan of locking on Fridays, so I recommend stay in the float boat over the weekend.

Today's BEST-EXECUTION Rates 

  • 30YR FIXED -  3.5% - 3.625%
  • FHA/VA -3.5% - 3.75%
  • 15 YEAR FIXED -  2.875% - 3.00%
  • 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).