January 16, 2017
Since our last report, mortgage rate trends have taken a turn upward. That move has given back some of the gains mentioned in our last report, but at the time of this writing we’re still looking at changes small enough to be reflected mostly in closing costs for affected borrowers, but some lenders have repriced as we’ll see below.
The upward move comes in spite of some retail sales economic data that has (in the past) helped mortgage rates rather than hurt them, but the existence of data of that nature doesn’t guarantee movement in mortgage rates; it all depends on investor reaction to the data. And we know that investor reactions aren’t always predictable and don’t always follow historical precedent.
30-year fixed rate conventional mortgage loan interest rates are in a best-execution range between 4.125% and 4.25%. Enough lenders are still at 4.125% that any changes for them would be reflected in closing costs, but if upward movement persists this week we could see that range eliminated.
FHA mortgage rates are holding steady at a best execution 3.75%. FHA mortgage rate trends often develop more slowly, requiring either dramatic one-day moves to break out of a “comfort zone” or consistent, smaller changes in the same direction over time. How long FHA mortgage rates will stay in the below-four-percent zone remains to be seen but it’s logical to assume that a persistent upward movement in rates over the coming week won’t favor remaining below 4%.
As always, the rates you see listed here are best execution rates which assume ideal conditions. Your ability to access rates like these depends greatly on your FICO scores and other financial qualifications. Your experience may vary and the rates listed here are not available to all borrowers or from all lenders.
Many industry pros seem to favor locking in the short term rather than floating in hopes that rates might improve. The talk among some is that we’re settling into a new range of rates and floating (which always carries a risk) is less rewarding.
Those who feel comfortable with the risks of floating here might consider it, but if you’re not comfortable taking chances at this stage locking is for you. Have a conversation with your lender for some expert advice in this area before choosing to float.
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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