Mortgage Rates Unchanged

Mortgage rates were essentially unchanged today, with some lenders in marginally better shape while others were marginally worse. Some of this discrepancy can be accounted for by mid-day reprices where lenders republish rate sheets on occasions where the mortgage backed securities market moves far enough in one direction. Lenders reprice at different times and under different circumstances, meaning that some underlying market movements can be bad enough to motivate some lenders to reprice.

The rest of the discrepancy is due to the fact that markets simply didn’t move much in the first place. Even without the reprices, some lenders were in better shape this morning while others were worse. For the most part, the differences are microscopic and the most prevalent 30yr Fixed quote for a top-tier scenario best-execution remains at 4.5%. Paying additional closing cost to move to 4.25% continues to make sense in some cases, but the amount of time required to break even (extra costs divided by monthly payment savings) is closer to 6 years in some cases compared to just under 5 years last week.

The rest of the week is pretty straightforward from a risk/reward standpoint. Both are huge and risk will continue to generally outweigh reward as long as interest rates continue to generally be trending higher. The steeper trends toward higher rates beginning in early May and late June have been consolidating since the July 5th blowout. “Consolidation” is just another way of saying “moving mostly sideways with plenty of ups and downs but generally with lower highs and higher lows.”

Rates can consolidate for several reasons, but one of the most common is simply because they are moving through a period of weeks that contain inconsequential information relative to some extremely important information. That’s probably what this consolidation owes itself to, and tomorrow is probably the day where we start getting that information. It’s not just one event either, but a rather impressive confluence of events including the Fed’s Policy Announcement, an important employment report, and first look at Q2 GDP among other things.

Markets are also cognizant that the mighty Employment Situation Report is released this Friday, and taken together with tomorrow’s events, should be plenty to suggest the next move higher or lower from this consolidative perch. That’s all well and good if the data and events work in favor of lower mortgage rates or even if they’re at odds in such a way that rates can at least stay flat, but the risk is that the data is unified in suggesting higher rates. If that happens, it could happen BIG, and this afternoon would be the time where you’d wish you would have locked. On the flipside, you could lock today and regret it if rates are able to make a more meaningful recovery, but that’s a different kind of regret than the “wish I would have locked” kind.

Today’s Best-Execution Rates
•30YR FIXED – 4.5%
•FHA/VA – 4.25%
•15 YEAR FIXED – 3.625%-3.75%
•5 YEAR ARMS – 3.0-3.25%

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About mortgagelendingstatenisland

I am a mortgage banking veteran with over 15 years of experience at every level of the mortgage arena. I am known as the "closer" because of my troubleshooting skils and ability to explain in detail to my clients and business partners "What Makes A Mortgage Approvable".

Posted on July 30, 2013, in Uncategorized and tagged , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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