December 7, 2015
On Thursday, mortgage loan interest rates took a significant jump higher, pushing 30-year fixed rate conventional mortgages to a best execution range between 4.0% and 4.125%. On Thursday FHA mortgage loan rates remained in their 3.75% best execution comfort zone (though you will see more variation among participating lenders for FHA mortgage loan rates).
All eyes were on Friday’s Employment Situation Report as make-or-break factor–was Thursday a portent of things to come? Or was it just a “moment”?
Come Friday, rates actually took back some of that lost ground in spite of an employment report that was, according to our sources, stronger than anticipated. The report didn’t have the anticipated effect (strong economic data is often a catalyst for rising mortgage loan rates based on the investor reaction to that data), and rates moved back into previous territory.
That means on Friday 30-year fixed rate conventional mortgages were at a best execution rate of 4.0%, while FHA mortgage loan interest rates remained at a best execution 3.75%.
Industry pros seem a bit more united in their “float” advice from Friday on–some believed the best course of action was to float through the weekend to see what might prevail come Monday. This week, there’s a Retail Sales report due on Friday that could push rates in one direction or the other depending on investor reaction to the report.
There are also Treasury auctions scheduled this week that could affect rates in the short term. If you are considering floating Monday or beyond, ask the advice of your loan officer to see what he or she thinks about the degree of risk involved. Floating is never risk-free, so it’s always best to get some solid advice before choosing to commit to an interest rate lock with your lender or hold off in hopes of getting a more competitive rate.
This week there is plenty of potential for upward pressure on mortgage loan rates, but arguably not as much as last week with the Employment Situation Report. Even so, locking or floating is a very important decision–best to ask for that advice as early as possible before deciding.
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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