May 18, 2016
Mortgage rates took a turn higher on Tuesday, with some market watchers pointing out that investor behavior ahead of the scheduled release of Fed meeting minutes on Wednesday afternoon could be responsible for some of that upward pressure on mortgage rates.
30-year fixed rate conventional mortgage loans moved out of their previous range and into a single best-execution 3.625%. This best execution rate is still low compared to past numbers but the elimination of the previous range means conventional mortgages are a bit farther away than their FHA counter parts. Previously there was some on-paper overlap between conventional and FHA rates, though FHA mortgage loan rates tend to vary more among participating lenders.
FHA mortgage loans are still in a best execution range between 3.25% and 3.5%. It may take several days of gradual changes or one day of significant change for FHA rates to move into a new comfort zone. The current one has been reported for some time now, but is always subject to change depending on market conditions.
Best execution numbers are not available to all borrowers or from all lenders-your experience may vary depending on a variety of factors including the availability of a participating lender offering these rates, your FICO scores and other financial qualifications.
Fed meeting minutes are due out Wednesday afternoon. Those minutes could have the power to change rates depending on investor reaction to them; in some cases the deciding factor is whether there is information that reassures investors (such as talk of delaying an interest rate hike) or makes them nervous (talk of a pending rate hike or accelerating the time table for one, for example).
Some industry professionals feel that Tuesday’s move higher may portent a short term upward trend, but we’ll see how investors react to the release of Fed minutes today. Two days of higher rates don’t add up to a general trend but it’s important to evaluate your “risk tolerance” if you need to make a lock/float decision soon.
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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