This post was updated 8/12/16 at 6 p.m.
Guest Post by Vic Kosor at Supreme Lending
CAN YOU BELIEVE IT?
Just a day after spiking higher from the lowest levels in a month, mortgage rates have dropped right back down to the bottom, pretty close to the lowest rates in three years.
Albeit, there have been one or two days with lower rates in recent months, but today’s rates are the absolute lowest in the last 30 days.
For best-case scenarios, a 3.375% quote is more common than 3.5% on conventional 30-year fixed loans. With current rate levels, there are once more offers as low as 3.25% —a rate that spurred a few to make a decision to buy and lock in.
However, these rates don’t come by easily, a perfect credit score, and other factors as far as loan-to-value, loan purpose and property type are important to consider.
Today’s Best-Execution Rates
- 30YR FIXED – 3.375%
- FHA/VA – 3.0 – 3.25%
- 15 YEAR FIXED – 2.75%
- 5 YEAR ARMS – 2.75 – 3.25%
Mortgage rates continued higher this week, extending a sharp move that began last week Friday following stronger-than-expected employment data.
There are two distinctly different ways to look at the current rate environment. On the one hand, the average conventional 30-year fixed rate continues hovering in the mid 3’s on top-tier scenarios. While that’s not quite as low as it was in early July, or on some occasions in 2012-2013, it’s still in the territory of “all-time lows” in the big picture.
On the other hand, current rates are near the highest levels in just over a month. This means they’re ‘threatening’—for lack of a better term—to break out of the low range that followed the UK’s vote to leave the EU (Brexit).
According to some schools of thought, once rates move up and out of that range, it could be a while before they come back. Opinions vary widely as to what “a while” might look like, but the point is that rates are getting back up to levels that risk a broader shift in momentum toward slightly higher rates.
We’ll cross that bridge when, and if, we come to it.
For now, it simply argues for a more defensive strategy (i.e. favoring locking vs. floating) until we see a more inspired push back to lower rates. More risk tolerant borrowers wouldn’t be crazy to float here in the hopes that the upper end of the range continues to hold, as long as they’re prepared to lock at a loss if rates do happen to break up and out of that range.
Loan Originator Perspective: Bonds have managed to not lose any more ground today following Friday’s huge jobs beat.
Today’s Best-Execution Rates (Aug. 8, 2016)
30YR FIXED – 3.5%
FHA/VA – 3.25%
15 YEAR FIXED – 2.75%
5 YEAR ARMS – 2.75 – 3.25%