Mortgages Rates got crushed today, relatively speaking. It's ironic that we noted yesterday's rates as getting close to 3/13's levels because today's rates are turning out to be closer to 3/14's significantly worse levels. While the recently prevailing Conventional 30yr Fixed Best Execution Rate of 4.0% remains intact, costs to obtain that rate will be immensely higher today vs yesterday. More than a few lenders will have issues hitting that 4.0% mark with a "no closing cost" loan. .
Adding to the sense of irony in comparing today and yesterday to 3/13 and 3/14 is that the same core event is a factor in both instances. Just like the last major example volatility in rates, today was courtesy of underlying markets interpreting Fed policy (via today's release of the Meeting Minutes from 3/13) as LESS LIKELY to conduct a third round of large-scale asset purchases.
This so-called quantitative easing is widely seen as a net-positive for longer term interest rates. If investors think the Fed isn't planning on a third round ("QE3"), they bet less aggressively on lower long term rates in anticipation that the Fed won't continue to be in the market acting as a large, regular, guaranteed buyer.
With respect to interest rates, a "buyer" creates demand that raises the prices of underlying securities in the bond market. When prices rise, yields (or RATES) fall). MBS, or the "Mortgage-Backed Securities" that most directly influence mortgage rates, are part of same Fixed-Income sector and actually part of the Fed's easing efforts.
So in a nutshell, the perception that the Fed is less likely to be a buyer in the future is causing investors to revalue various Fixed-Income investments such as MBS, and the result is significantly lower prices and somewhat higher mortgage rates.
30-year fixed 4.00% APR-4.050% 0 points
20 year fixed-4.00% APR-4.036% 0 points
15 year fixed-3.375% APR-3.458% 0 points
10 year fixed-3.125% APR-3.230% 0 points
5/1 ARM-3.000% APR-3.329% 0 points
7/1 ARM-3.125% APR-3.419% 0 points
FHA
30 year fixed-3.875% APR-3.934% 0 points
15 year fixed-3.125% APR-3.230% 0 points
Jumbo- over $576,000 (Fairfield County)
30 year fixed-4.125% APR 4.240% 0 points
15 year fixed-3.500% APR 3.574% 0 points
5/1 ARM-3.250% APR 3.540% 0 points
7/1 ARM-3.625% APR 3.940% 0 points
Pat Leary is a mortgage banker with over 12 years experience as a lending specialist in Connecticut. Her passion is to guide her clients through the mortgage process. Pat takes pride on providing great customer service, through communication, trust and integrity, and strives to offer the best mortgage products and service in the industry. We're confident that you will receive the personal attention that you deserve. As a leading Mortgage Banker in Connecticut, Pat is responsible for structuring your financing with the expertise to answer any questions you may have on rates, fees and products.
Pat Leary
NMLS #99279
Atlantic Home Loans
830 Post Road East
Westport CT 06880
203-645-1037 cell
203-691-9788 ext 226
1-203-413-5647 fax
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