July 15, 2016
Mortgage loan rates have been on the rise most of the week; three out of four business days were marked by higher numbers or closing costs and with Brexit, overseas terrorism headlines, and domestic scheduled economic data releases, it’s possible we’re going to see rates creeping up over the short term next week much the way we did this week.
At the time of this writing, 30-year fixed rate conventional mortgages are, best execution, reported at or near 3.375%, up this week from the previous week’s range bottoming out at 3.25%. FHA mortgage loan rates are currently holding in their 3.25% comfort zone. How long can they persist at or near these levels? Next week will be interesting to watch.
(As always, best execution rates listed here assume ideal conditions; your experience may vary based on your financial qualifications. Best execution rates are not available from all lenders or to all borrowers. You may find some lenders offering different rates depending on the market, applicant FICO scores and other factors.)
Some market watchers agree that the short term trend seems to be for rates to move higher. If you are on the fence about locking and floating, have a discussion with your loan officer this week.
Those who are closing soon may wish to cut the risk of floating (holding off on a mortgage rate lock commitment with the lender in hopes of a lower rate), but if your “risk tolerance” is high, you may benefit from floating in the short term depending on which way the markets go.
We always mention that floating is never risk-free. In the current environment many feel higher rates are ahead, as mentioned above. There are a set of variables that can affect this including breaking news; yesterday’s market activity doesn’t necessarily guarantee tomorrow’s outcomes, so it’s smart to set a limit to how high rates might go (if you decided to float) before you make the commitment.
As many point out, we’re still on the “historic lows” side of the equation for now, so locking isn’t a bad call. Bottom line, if you like what you are offered, there is nothing wrong with locking up that rate and avoiding the risk of hoping for another dip in mortgage loan interest rates.
Next week there are a variety of economic data releases that could affect rates, including Tuesday’s Housing Starts report and Thursday’s Jobless Claims. Investor reaction to these, Treasury auctions, or other data releases next week could hinder or help rates, but you’ll need to keep an eye on the international news headlines, too, based on what we’ve seen this week.
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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