August 15, 2016
Mortgage rates went higher and lower last week. They bounced higher Monday, recovered Tuesday, and repeated that cycle on Thursday and Friday. At week’s end, rates recovered back to 30-day lows, but there are a variety of scheduled economic data releases ahead that could push rates higher depending on investor reaction to them.
Friday, 30-year fixed rate conventional mortgages wound up in range between 3.375 and 3.5% best execution, though some sources claim 3.375% is more available at the time of this writing. FHA mortgage loan interest rates are holding in their comfort zone at 3.25% best execution, though FHA rates can vary more among participating lenders. It pays to shop around.
Best execution rates are offered to borrowers with ideal credit. Your FICO scores, loan repayment history and other financial qualifications are a major factor in determining your access to the rates listed here. Your experience may vary, these rates are not available to all borrowers or from all lenders.
Looking ahead, this week is full-there’s a release of Consumer Price Index data, housing statistics, both due out on Tuesday. On Wednesday we’ll have the release of the minutes from the July meeting of the Fed. That always has the power to affect rates, especially when investors are looking for any hint of a direction from the Fed with regard to interest rates and whether they will be hiked soon (or not).
Locking and floating questions are tricky to answer in a rate environment like this. Some market watchers feel that rates are on their way down in the short term, but with a variety of scheduled economic data releases this week, the potential for upward pressure on rates is there. Floating (holding off on a mortgage loan interest rate lock commitment with the lender in hopes that rates will go lower before the borrower finally does lock) is never risk-free.
Borrowers should assess the risk, have a conversation with the lender, and make the most informed choice possible before choosing to float. With rates at 30-day lows, locking in a rate with your loan officer isn’t a bad choice, but if you do feel that floating is the best way to go, it’s best to choose how high rates might climb before you do lock just in case.
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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