Mortgage Rates Hold Steady; Volatility Ahead Sep 15 2014, 4:22PM Mortgage rates managed to hold steady today, which matches the very best performance of any other day in September. In other words, rates have either been flat or higher every day for the past 11 days. As discussed last week, this quick move to higher rates is based, to some unknown extent, on anxiety over the upcoming Fed Announcement. Market participants are concerned the Fed will change the verbiage of their official policy statement to indicate a potential rate hike earlier than expected. Bond markets respond to that concern with weakness and when bond markets are weaker, rates move higher. Interestingly enough, bond markets were actually somewhat stronger today, but it wasnt enough to make for a widespread improvement in lender rate sheets. Some lenders were, in fact, slightly better, but plenty were slightly weaker. The net effect is unchanged rates compared to Fridays latest offerings. 4.25% remains the most prevalently-quoted conforming 30yr fixed rate for top tier scenarios. 4.125% had that distinction until Friday. The Fed Announcement isnt necessarily the only motivation out there for bond markets. But because that idea has become so ingrained in market psyche and media coverage, the reaction to Wednesdays Announcement cant help but cause volatility for rates. Even though today was flat, theres plenty of risk that rates could continue higher. Loan Originator Perspective Last Thursday, in the middle of the selling, we saw a day of slight improvement. That proved to be a day to lock for those that missed it as selling continued on Friday. This may be that opportunity, this week. Were outside the long term range of lower rates, and until we have affirmation of a continued more lower....rising rate is the highest likelihood. Locking is the smartest option. -Brent Borcherding, brentborcherding At this point, the damage has been done to rate sheets. If you are still floating, i would continue to do so until at least tomorrow. Rates have regained some of the losses from last week; however, the benchmark 10 year note has broken out of the range to the top side. The biggest event this week will be Wednesdays FOMC annoucement where many believe they will change the verbiage regarding low rates for an extended period which is the main cause of the recent and rapid rise in rates. If they keep the verbiage unchanged, hopefully we will regain more of the recent losses. -Victor Burek, Open Mortgage Well, we stemmed the bleeding today, which is a good thing considering last weeks selloff. Its too early to tell if weve turned the corner, will all depend on Wednesdays Fed statement (and investors response to it). With international strife on the back burner momentarily, were focused on Chairman Yellens economic outlook. It was a year ago that the Fed surprised us all by NOT tapering their bond purchases as expected, will be interesting to see what Wednesdays statement holds for rates. If youre floating, have your loan officer on speed dial Wednesday. At least the Fed statement hits mid-day, giving us time to lock loans in progress if pricing starts to worsen.-Ted Rood, Senior Originator, tedroodteam The bleeding finally stopped today in the MBS market. Is it temporary or not is the key question which will be answered Wednesday when the Fed decision is announced. Until then floating makes the most sense. Manny Gomes, Branch Manager, Norcom Mortgage Todays Best-Execution Rates 30YR FIXED - 4.25 FHA/VA - 3.75-4.0% 15 YEAR FIXED - 3.375-3.5 5 YEAR ARMS - 3.0-3.50% depending on the lender
Posted on: Mon, 15 Sep 2014 23:18:22 +0000
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