Mortgage rates have moved lower 11 out of the last 13 days with rates holding steady the other 2 of 11 days. This was in response to the unanticipated announcement on September 18th, 2013 that the Fed would not taper the current asset purchase program. September 2013 Fed statement here (see third paragraph). The news caught the interest rate market by surprise with rates moving sharply lower. Mortgage rates followed suit with rates continuing lower, unabated, since the announcement.
Brokers, Loan Officers, and their clients, that were sitting on the fence prior to the announcement, and waiting to lock their loans, were rewarded handsomely immediately following the announcement. The old adage that rates move up in tablespoons and down in teaspoons still rings true as mortgage rates have been grinding lower from the highs reached in this summer’s mortgage rate spike. This rate spike took 30 year fixed mortgages from the mid 3% range to some trading as high as the five handle in/around 4th of July. Those Loan Originators and their clients that have been even more patient after the most recent Fed announcement have been able to harvest the lower rates that have followed through in the last two weeks.
Best execution for agency, non-jumbo, 30 year mortgages reached 2 year highs of 4.875% in the weeks before the most recent Fed announcement. Within the last 30 calendar days, best execution has improved by .625% to a current 4.25%. Best Execution is described here.
My mortgage rates sheet (as of Friday September 27th, 2013) looks like this. Rates subject to change, rates change daily.
5YR ARM…….3.125% (3.193% apr)
7YR ARM…….3.50% (3.570% apr)
10YR ARM…..3.99% (4.055% apr)
30YR FIXED…4.125% (4.197% apr)
15YR FIXED…3.25% (3.375% apr)
This assumption is based upon a $250K purchase price with 20% down and 740 credit score.
This week brings the vaunted employment situation report (more information here) from the Bureau of Labor Statistics on Friday 10/4 at 7:30am CDT. All eyes look to this report to give inputs to the barometer of the health of the US economy. This report will be influential to Fed policy in relation to future asset purchases. The next Fed announcement will be coming at the conclusion of the approaching October29-30th meeting. If Friday’s jobs report (and any possible revisions) shows further deterioration in the jobs market, and a disappointment of expectations (170K-180K is the current prediction) we could see mortgage rates dip even lower. (More information on the week ahead here)
Adding to the mix is that Friday’s jobs number may not be disseminated due to the impending government shutdown! (More information here)
So we shall see what the week brings.
Will the government shut down?
Will the jobs report bring optimism or pessimism?
Will the jobs report even come out this Friday?
Will mortgage rates go even lower giving those re-finance fence sitters a chance to get into the re-finance market that they missed earlier this spring?
I don’t know the answers but it’s shaping up to be an interesting week.
This article was written by Gil Valentine and is not meant to be taken as financial advice. All links are curated by Gil Valentine and are provided to you, the reader, to give you a more thorough education on the contents of this article.
If you would like to contact Gil about questions about mortgages, you can call him at 312-961-4510 or email him at email@example.com. To find out more about him and the people he works with, please go to www.gilvalentine.com Gil is a licensed Loan Officer, NMLS#1019717
“Midwest Lending Corporation 1732 West Hubbard #2A Chicago IL 60622. Illinois Mortgage Licensee#MB6759631 NMLS#204212 Equal Housing Lender”