December 5, 2016
Since our last look at mortgage loan interest rate trends, rates spiked to 24-month highs (Thursday), but then recovered on Friday. Thursday’s move took 30-year fixed rate conventional mortgage loan rates to a range between 4.25% and 4.375% (best execution). But Friday saw the same rates move back down to at or near 4.125%, best execution.
On both Thursday and Friday, FHA mortgage rates remained at 4.0%, but that’s up from a previous range that still had a bottom end in the sub-four percent zone. That is gone for now, but FHA rates, best execution, haven’t been in the four percent zone in quite some time leading up to the current upward trend.
Friday’s rate recovery happened in spite of job report numbers that, in times past, have served to push mortgage rates higher depending on investor reaction to those numbers. A positive outlook on jobs tends to have a negative effect on rates but there are times when that jobs data is ignored in favor of other factors. And that’s what happened on Friday.
Market watchers are also quick to point out that in any trend, higher or lower, a correction will come; it’s no surprise that Friday’s recovery happened with that in mind. But such moves are impossible to predict as they depend on the whims of the market and investor reaction to current news, conditions or other influences.
The rates you see listed here are reported as best execution numbers; that assumes ideal conditions such as a well-qualified borrower with outstanding FICO scores and other financial qualifications. Your access to these rates depends greatly on your credit history. The rates listed here are not available to all borrowers or from all lenders. Your experience may vary.
Current mortgage rate trends have industry pros agreeing that locking is the safest move for now. Borrowers who choose to float in hopes of getting a lower rate do so with an elevated risk. Floating is never risk-free, but at the time of this writing that risk is greatly increased.
It’s best to have a conversation with your loan officer about this if you are unsure. There is great potential for volatility at this time, and expert advice on locking or floating can only help you make a more informed choice.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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