July 11, 2016
In our last report we mentioned that it wouldn’t be a surprise that, in our next look at mortgage loan interest rate trends if we had some higher rates to discuss. That did happen last Thursday as mortgage loan rates crept a bit higher, but when markets closed on Friday after the much-anticipated jobs report, rates were holding steadier than the day before.
That means that following a nine-day winning streak with lower rates, 30-year fixed rate conventional mortgages are now within a range, best execution, of between 3.25% for some lenders and 3.375% for others.
It’s not often that conventional lenders offer rates in the same range as FHA loans, and FHA’s best execution 3.25% remains for now; if conditions stay the same (more or less) we could find this as the FHA rate “comfort zone” until conditions move to push those rates higher.
That could happen with one substantial move higher in a single day (it’s happened before) or after a series of days where conventional rates have moved higher in smaller increments. Either way, it’s important to recognize that the lows we see now are bound for a move higher at some point if for no other reason than to “correct”.
Interest rates can be affected by investor reaction to world events like the Brexit vote, but also things like Friday’s jobs report, announcements from the Fed, Treasury auctions, etc. so the factors that kept rates moving lower over the past nine days might not have the same effects as new breaking news or economic data in the coming week, depending on circumstances.
As always, the rates you see listed here are considered “best execution rates” which are offered to borrowers with outstanding FICO scores and other financial qualifications. Your ability to access these rates depends greatly on your financial qualifications, and your experience may vary depending on the lender.
The week ahead includes Treasury auctions, some economic data releases, and of course any further developments on Brexit and the world economy’s reaction to those developments.
Keep a close eye on the news this week if you haven’t made an interest rate lock commitment with your lender; rates could be set to rise depending on investor reaction to the numerous potential influences this week, but we could see things hover near recent lows depending on how this week’s economic data and other factors pan out.
Many industry pros are pointing out that there’s nothing bad about locking now, considering that rates have fallen close to three-year lows, but those who haven’t locked yet should be mindful of how quickly a mortgage rate environment can change over the short term.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
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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