Mortgage Rates On The Fence In The Days To Come

Mortgage rates bounced back and forth in a relatively tight range before going out at their highest levels of the week last Friday. Although prices of mortgage-backed securities managed to rally of their lows of the day, most lenders did not reprice for the better.

The only economic data we got today was the First Quarter Residential Vacancies and Homeownership Report. While vacancy rates are appearing to moderate, home ownership in the U.S. has declined to a level last seen at the beginning of the decade. The greatest decrease is among the youngest homeowners

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Reports from fellow mortgage professionals indicate lender rate sheets to be improved from Friday. The par 30 year conventional rate mortgage does remain in the 4.875% to 5.125% range for well qualified consumers though. To secure a par interest rate on a conventional mortgage you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee. You may elect to pay less in closing costs but you will have to accept a higher interest rate.

When evaluating the risk/reward of floating, you have very little to gain by floating and a lot to risk. We have several high impacting events taking place this week which could pressure mortgage rates higher very quickly. With that in mind, if you need to decide on locking or floating in the next week or are within 15 days of closing, I would lock today. If you have a longer decision making timeline, I am floating on a day to day basis.