Mortgage Rate Trends: Lower
Mortgage rate trends have generally been moving in favor or lower rates over the short term, and since our last report we’ve seen those rates move into territory not firmly held for quite some time. What is good for the economy is often bad for mortgage rates, and vice-versa, so the uncertain news you see related to some economic issues at home can be viewed as a contributing factor for lower rate activity in recent days.
What we’re seeing as of late includes the influence of global economic headlines, domestic questions about the value of the U.S. dollar following statements out of Washington, and stock market activity. All this contributing toward the downward trend in mortgage rates.
Investors hate uncertainty, and often run to the safety of bonds when times get tough. Bond market activity can have an influence on mortgage loan rates, so the combination of negative headlines and investor reaction to those headlines can lead to more favorable mortgage rate trends.
And what mortgage rate activity have we seen since our last report?
30-year fixed rate conventional mortgages have fallen to a best execution 4.0%. It’s not certain whether there’s enough momentum or if economic headlines are enough to push conventional rates back down to the high three percent range, but the improvements we’ve seen of late are definitely welcome.
FHA mortgage loan rates are reported at a best execution 3.75%, down from the previously reported range in recent weeks between 3.75% and 4.25% best execution.
As always, the rates listed here are best execution rates. Your ability to access rates like these depends greatly on your financial qualifications. Your FICO scores, loan repayment history and other factors will all play a part in what interest rates are available to you. The rates listed here are not available to all borrowers or from all lenders; your experience may vary.
Some market watchers and industry professionals believe, based on current conditions, that further improvements are possible. If you are not sure whether to “lock” or to “float” with respect to making a mortgage rate lock commitment with your lender, have a conversation with your loan officer to get some expert advice. Floating is never without risk, but at the time of this writing, that risk may be lower due to the current economic and political climate.
That said, such conditions are subject to immediate change based on any number of variables including breaking news, clarification of economic policy at home or abroad, etc. Floating should always be done with an “escape plan” or a “ceiling” setting a limit to how high rates might climb, should current trends reverse themselves, before you make the commitment.