May 7th, 2014 11:00 AM by Jackie A. Graves, President
Mortgage rates fell back to their lowest levels of 2014, with most
lenders in similar territory to last Friday. Market movement was
moderate, but grew increasingly positive for MBS (the
mortgage-backed-securities that dictate lenders' rates) as the day progressed.
As such, some lenders released positive mid-day reprices. Before those,
rates were just slightly higher on average. The most prevalently quoted
conforming 30yr fixed rate for best-case scenarios (best-execution) remains at 4.25%, and is currently closer to 4.125%
than the previous rate of 4.375%. Today's improvement was seen in the form of
slightly lower closing costs. That change in costs equates to an
effective rate change of 0.02%.
As we discussed yesterday, 4.25% is still technically the
outer edge of the longer term range. That range, stretching back to the
beginning of February, has centered on 4.375 and 4.5% but has moved out to
4.25% and 4.625% at it's best and worst moments respectively. Today's
strength makes this move to 4.25% the most aggressive one yet. While that
means we stand a chance to break the range in the coming days, until that
actually happens, history suggests more
risk associated with floating
when we make it down to these levels.