August 22, 2014
If you are looking for an FHA home loan, chances are good you are paying attention to the rise and fall of FHA mortgage rates. There are many reason why these rates can change day to day or week to week. One factor—economic data releases that suggests weakness in the economy. This data can influence rates and push them lower, or, conversely, when economic/jobs data indicates improvement, rates can and sometimes do move higher as a result. But other factors can push rates higher or lower, too. We found a good example of that recently–mortgage rates moving lower based on investor reaction to world headlines.
Last Friday, mortgage rates hit their lowest levels in the last eight weeks or so. That drop in rates was attributed to how investors reacted following news of developments in the Russia/Ukraine situation. Depending on circumstances with these types of global events, investors may move away from stocks and into bonds as a temporary measure to protect investment dollars–behavior that influences mortgage rates.
All during the past week, we saw mortgage rates moving higher after that sudden drop over world headlines. That is a common factor in such rate changes; the global headlines that push rates lower one day suddenly are no longer a factor for investors the next. The gains can vanish as quickly as they appear.
This week, global headlines reporting a de-escalation in the Ukraine situation seemed to influence an upward trend in mortgage loan rates, but Russia/Ukraine was not the only factor that influenced mortgage rates–the Fed released its minutes from its most recent meeting; the contents of those minutes indicate a more optimistic tone at the agency, which seems to have translated into more upward pressure on mortgage rates. In general, if there’s good news for the economy, there can potentially be bad news for mortgage rates.
Some watching lender’s rate sheets for “best execution” FHA mortgage loan rates will notice that FHA and VA loan rates, while varying more from lender to lender, do manage to stay within a certain range as of late. The average “ideal” mortgage loan rate for well qualified borrowers tended to hover in the 3.75% range this week in spite of all the headlines, the changes, and the upward pressure. FHA loan rates tend to hold out, at least in recent times, in a “comfort zone” that can change when the movement of rates is significant enough to push the best execution rate into new territory.
Mortgage rates this week did move up and down, but managed to stay, in general, in the ranges listed below. Please note that the numbers reported here are listed as “best execution” mortgage loan rates and assume ideal conditions including excellent FICO scores, loan repayment history and other financial qualifications. These rates are not available to all borrowers or from all lenders. Your experience may vary.
30-Year Fixed Rate Conventional Mortgage Loans: Between 4.125% and 4.3%
VA Mortgage Rates: 3.75% or higher depending on the financial institution
FHA Mortgage Rates: 3.75% or higher, depending on the financial institution
15-Year Fixed Rate Mortgages: 3.25% or higher
5-Year Adjustable Rate Mortgages: 3.0% or higher
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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