Mortgage Rates Stay Flat to Begin Busy Week Oct 28 2013, 4:00PM Mortgage rates stayed in line with recent 4-month lows today. In some cases, there was a slight movement in the closing costs associated with prevailing rates, but the rates themselves didnt change. The most prevalent Conforming 30yr fixed quote (best-execution) remained at 4.125%. Every day since last weeks jobs report has been relatively calm for mortgage rates. Even then, there was reason to believe that we could be lacking some direction until the next major round of economic data came in. That culminates in next weeks jobs report (which is occurring so close to the previous report due to shutdown-related rescheduling), but the current week can certainly play a role. Economic data is an important factor in mortgage rate movement for 2 primary reasons. First, theres the basic deductive logic that a stronger economy can support higher interest rates, thus stronger economic data tends to push rates higher, all other things being equal. The second reason has to do with the Federal Reserves current role in bond markets. While market participants no longer expect the Fed to reduce asset purchases soon, the longer-term assessment of Fed policy still affects rates. If markets think the Fed will continue to push back the eventual end of their buying program, it gives rates more room to stay or move lower. These two factors both suggest the same movement in the same circumstance, i.e. weaker data suggests lower rates and stronger data suggests higher rates. But as far as the Fed policy component is concerned, some of the economic data is significantly more important than others--namely the big jobs report next week. Thats not to say that the other data cant have an impact, but it has to be fairly unified in its suggestion or the report has to be one of the more important ones. Tomorrows Retail Sales data is a good example of a non-employment-related report that has the power to move markets. Its joined by several other reports that together, stand a much better chance to ensure we dont end tomorrow in relatively unchanged territory for a 5th straight day. Todays Best-Execution Rates 30YR FIXED - 4.125% FHA/VA - 3.75-4.0% 15 YEAR FIXED - 3.25-3.375% 5 YEAR ARMS - 3.0-3.50% depending on the lender
Posted on: Tue, 29 Oct 2013 02:46:28 +0000
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