Mortgage Interest Rate Market Guide

Short note day due to work volume:

Mortgage rates seeing some moderate signs of improvement. FHA offerings currently in the mid 5's. Course change could happen very quickly so I recommend you lock while rates are good.

Short note again today due to a heavy workload.

Rates continue to improve slightly, thank goodness. If you're floating, time to lock because things can change quickly. 

Short note day today due to work requirements:

Mortgage backed securities turning a little favorable for borrowers on data about current jobless claims. You may see a tiny improvement in rates today but that could go away quickly.

 

So far this morning...

- MBS a bit lower before 2 yr auction today ( worse for rates )

- Moody's says US AAA rating safe for now ( good for rates 

- Home Sales index coming at 10AM est

- Important: 2yr auction at 1pm

30 year prime conforming offered at around 5.625% 5.68 apr

30 year prime FHA 5.75% apr 5.81%

5/1 FHA not priced well enough to mention

The morning snapshot of activity So Far...

-World Bank increases it's prediction for global economic retraction which is reducing inflationary pressure ( good for rates )

- stock futures lose overnight and open to the downside ( good for rates )

- Treasury's with open with gains ( good for rates )

- MBS up ( good for rates )

- quiet day for data

We should see some mild improvements in mortgage rates.

We're up, we're down, we're flat... where the needle stops is anyones guess...

Market opened up in the same pattern as yesterday. Not changes to report with Mortgage Interest Rates at this point.

Loan consumers, please contact one of our mortgage experts on this site for detailed rate and program structures for your region. Email me if you need a referral.

Mortgage interest rates shot up over the last 14 days and have since settled down a bit. May housing starts are up but inflation is in check. I’m thinking we’ll be in the below range for a few days.

The average rate for the top 15 national banks with the following terms: Owner occupied homes, 30 year fixed mortgage, RATE LOCKED FOR 30 DAYS, platinum borrower*, zero origination, zero discount points is-

Conventional loans:

5.75%** (6.0 APR) You can buy this rate down to 5.375% (5.7 APR) with a 1 point fee.

FHA- Most lenders now only accepting 620 min credit score

5.75%***(6.1 APR) with the below fee structure. You can buy this rate down to 5.5% (5.8 APR) with a 1 point fee.

FHA 5 year fixed: 4.75%***(4.99 APR) with the below fee structure. You can buy this rate down to 4.25% (4.43 APR) with a 1 point fee.

FHA 3 year fixed: 4.75%***(4.99 APR) with the below fee structure. You can buy this rate down to 3.75% (3.93 APR) with a 1 point fee.

15 bank closing cost averages (title, escrows and settlement not included)- appraisal, credit, underwriting, processing, tax service, flood certification, document drawing, etc.-

$1500***

***The lower the rate the higher the fees. The higher the rate the lower the fees. Just like a teeter totter.

See my January posts for new rate/fee adds introduced by Fannie Mae for conventional loans

Brilliant graph shows how far we've come since the Feds infusion of cash into the mortgage market through their MBS purchase program. We are currently improving in rates as Treasuries recover. Expect 30 year fixed primes to be priced around 5.625% with zero points. See my earlier posts for pricing parameters.

We're retesting yesterdays strength. At this point in the day I see no changes from yesterdays rates. We've settled comfortably in the honest High 5's to 6% range for 30 year prime conventional fixed's. Don't forget to get a lock confirmation from your loan officer. Seems a lot of loan officers were playing the market which resulted in many borrowers not getting the rate they were "promised".

Rates are taking time off this morning from their upward ascent. Not too much of a surprize because as I wrote a few days ago I expected rates to start climbing actually two months ago but did feel that they would find a comfort range and then settle in for a while. I wouldn't be surprized if we haven't found that range today. I expect 30 year conventionals to linger around the 6% range but as usual I will keep you posted if I see any clear trends emerging with mortgage interest rates.

Something that I'm seeing a lot of right now and the same of which loan consumers should be very aware of...

There are many mortgage lenders and brokers (hopefully not yours) that will tell you that your mortgage interest rate is "locked" yet they intentially do NOT lock the rate in order to hedge the market for their personal gain. This can happen at your bank or broker- it doesn't matter where the lending is taking place.

This scenario plays out extensively with loan officers that quote interest rates an 1/8th or .25 below the days market interest rates to capture your business, and subsequently try to chase the rates down to meet promises. Many of the loan officers in the mortgage business today do not have the seasoning to understand inflationary pressures and how quickly financial instruments can change course. 

In the last 14 days we've had a great deal of upward momentum in the mortgage rate market and my estimation is that 40-60% of the mortgage files in the "pipeline" have NOT been locked.

So... If you get a call from your mortgage person that "rates went against us" or "the lender never received the lock" or something else that doesn't sound legitimate... look deeper into the situation because you may not be receiving the truth. 

Again, in my estimation 40-60% of files have not been rate locked. To me it's a telling story of how business is conducted in this country. Not just the mortgage business but all businesses.

Todays rates are opening substantially worse. I may post rates when the dust settles but right now I'm sending a note to my customers making certain they understand that I cared enough to lock their rates.

Rates shot up over the last 10 days. Home sales figures, concerns over inflation and production improvements pushed rates up.

 Expect continued rate increases. I expect most 30 year fixed mortgages to settle around 6.5% before settling in for a while.

The average rate for the top 15 national banks with the following terms: Owner occupied homes, 30 year fixed mortgage, RATE LOCKED FOR 30 DAYS, platinum borrower*, zero origination, zero discount points is- Conventional loans: 5.875%** (6.01 APR) You can buy this rate down to 5.5% (5.79 APR) with a 1 point fee. FHA- Most lenders now only accepting 620 min credit score 6.0%***(6.12 APR) with the below fee structure. You can buy this rate down to 5.75 (5.98APR) % with a 1 point fee.

FHA 5 year fixed: 4.625%***(4.78APR) with the below fee structure. You can buy this rate down to 4.125% (4.33APR) with a 1 point fee.
15 bank closing cost averages (title, escrows and settlement not included)- appraisal, credit, underwriting, processing, tax service, flood certification, document drawing, etc.- $1500***

***The lower the rate the higher the fees. The higher the rate the lower the fees. Just like a teeter totter.

See my January posts for new rate/fee adds introduced by Fannie Mae for conventional loans

Mortgage rates continue their bearish ascent higher. We're looking to Treasury auctions this week to give us a more clearer picture. At this moment, expect mortgage rates to come out slightly higher this morning. Looking at the 10 year T-Bill momentum will give you some idea of what's happening with the bond market.

We're not doing well with rates today. The improving economy is creating inflationary realities. Though we are off the mornings deteriated pricing, we are still expecting higher than yesterday rates.