Main Content

Home » Blog » Mortgage Rates Increase Rapidly

Mortgage Rates Increase Rapidly

Mortgage

Mortgage rates rose rapidly today, almost completely erasing the improvement following last week’s Fed Announcement. This is especially ironic considering most major media outlets are running Freddie Mac’s weekly mortgage rate survey headline. Because that survey receives most of its responses on Monday and Tuesday, it fully benefited from the stronger levels earlier in the week after having totally missed out on last Wednesday and Thursday’s big move lower. As such, the headlines suggest that rates are significantly lower this week. That was certainly true on Tuesday afternoon, but rates have risen roughly an eighth of a point since then. That’s a big move considering we’ve gone entire months without moving more than an eighth.
Specifically, what had been 3.625 to 3.75% is now 3.75 to 3.875% in terms of the most prevalently-quoted conventional 30yr fixed rates for top tier scenarios. The upfront costs associated with moving down to 3.75 from 3.875% are still quite low. If a borrower prefers paying a bit more upfront in exchange for lower payments, it’s worth looking into. The breakeven time frame is between 4 and 5 years for most lenders (where the monthly payment savings supersede the additional upfront cost).

Yesterday, we discussed the fact that the move higher was strong enough that it shouldn’t be disregarded, but that it would take another day of similar weakness to confirm. Instead, today ended up being significantly weaker. This wasn’t due to trading levels in markets as much as it was simply lenders getting caught up with a quick market move. In fact, apart from being a bit more volatile, today’s market weakness is almost exactly the same as yesterday’s.

Courtesy of Mortgage News Daily by Matthew Graham