Mortgage Rates Change Course Mid-Day to End Lower

Mortgage rates began the day in slightly higher territory, but most lenders adjusted rate sheets mid-day, bringing the average rate just below yesterday's latest offerings.  Underlying market conditions are as much a culprit in the welcome turnaround as anything.  Conventional 30yr Fixed quotes for the most ideal scenarios (best-execution) are still most readily found at 4.625% though some lenders are an eighth higher or lower.

The typical correlations between economic data and market movements broke down to some extent (for the 4th time this week) due to lighter participation among traders and looming geopolitical uncertainty surrounding Syria. In the same way that markets refused to take rates any lower on Tuesday afternoon, they weren't eager to take them any higher this morning.  It continues to be the case that the biggest movements will be dependent on more thorough market participation, which isn't guaranteed to show up until next week.

Loan Originator Perspectives

"Rates improve modestly today. Three day weekend ahead. Actually some Lenders close early tomorrow to allow employees additional travel time. Look for tomorrow's pricing to be a little defensive (worse) given the holiday and uncertainty in regard to Syria." -Bob Van Gilder, Finance One Mortgage

"A breath of fresh air for a change. The mornings data was not bond friendly, but the market reversed its course and we have recovered all of today's losses and some of yesterdays. Going into the holiday weekend you should consider locking today to prevent the volatility to follow next week into NFP. The 10 YR treasury is range bound and for now is settling under 2.80, a good sign but nothing to get excited about yet. Closing within 2 weeks should be locked 3-4 weeks should consider locking prior to NFP." -Constantine Floropoulos, Quontic Bank

"Decent gains today with marginal trade volume after a slow start. We ended up with multiple lender price improvements, and regained yesterday's losses. Looks like Syria is taking a back seat to Labor Day barbeque plans for the moment, tomorrow will be a quiet day in trading pits. Lenders often get defensive over 3 day weekends (worsen pricing at end of day), will be interesting to see if international unrest changes that attitude tomorrow." -Ted Rood, Senior Originator, Wintrust Mortgage

Today's Best-Execution Rates

• 30YR FIXED - 4.625%
  
• FHA/VA - 4.25% or 4.75%
  
• 15 YEAR FIXED -  3.75%-3.875%
  
• 5 YEAR ARMS -  3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations

• After rising consistently from all-time lows in September and October 2012, rates challenged the long term trend higher, but failed to sustain a breakout
• Uncertainty over the Fed's bond-buying plans is causing immense volatility in rates markets and generally leading rates quickly higher
  
• Fears about the Fed's bond-buying intentions were proven well-founded on May 22nd when rates rose to 1yr highs after the Fed indicated their intention to taper bond buying programs sooner vs later
• The June 19th FOMC Statement and Press Conference confirmed the suspicions.  Although tapering wasn't announced, the Fed made no move to counter the notion that they will decrease bond buying soon if the economic trajectory continues
• Rates Markets "broke down" following that, as traders realized just how much buy-in there was to the ongoing presence of QE.  These convulsions led to one of the fastest moves higher in the history of mortgage rates and market participants have not been eager to be the among the first explorers to head back into lower rate territory until they're sure they'll have some company.
• (As always, please keep in mind that our Best-Execution rate always pertains to a completely ideal scenario.  There are many reasons a quoted rate may differ from 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).