|30 Year FRM||5.15%||Better by .02%|
|15 Year FRM||4.62%||Worse by .03%|
|5/1 Year ARM||3.94%||Worse by .03%|
|Jumbo 30 Year FRM||5.36%||Worse by .03%|
Here is today's look at best mortgage rates (which may require points), provided by Mortgage News Daily, Freddie Mac, and other sources. Note that Freddie Mac's AVERAGE rates are typically higher than BEST rates, because average rates include surcharges for risks associated with property types, down payments, and credit scores. To be eligible for BEST rates, borrowers need spotless credit (740 score or better), a sizable down payment (20-25%) or equity amount, and stable, adequate, and documentable income. In addition, the property must be located in a healthy (not declining) market and must be conventionally built.
Mortgage-backed securities (MBS) markets gave back some of yesterday's improvements this morning. However, it's still early. Bond prices are up due to a $6.5 billion dollar Fed purchase but those gains haven't translated to breaks on mortgage rates yet. Stock markets have not been influenced for the better--oil prices have doubled since February as Asia is demanding more to meet it's increasing fuel requirements and both the Dow and Nasdaq are off about 1%.
In addition, May's Producer Price Index showed stable prices for producers, favorable news for bonds and MBS. In addition, May's Industrial Production report showed a decline in US production, and anything depicting a weakening economy should also influence mortgage rates for the better. On the other side, though, May's Housing Starts data showed a 17.2% increase in new home starts last month--much higher than expected. This report is considered the least important of the three, however, and mortgage lenders should hold steady or perhaps reprice for the better as the stocks take a beating and bonds continue to improve. Wednesday's Consumer price Index (CPI), and Thurday's weekly jobless claims will be the ones to watch.
I'd check for rate improvements this afternoon, then: , I would LOCK my rate if closing within 15 days; otherwise I would FLOAT my mortgage rate. This is only an opinion--what I would do if I were closing a mortgage at this time. Your decision may depend on other factors such as the strength of your loan approval and your tolerance for risk, and must be made with those in mind.
Liz Freeman has more than a decade of mortgage lending experience. She writes about mortgage and finance issues and is a regular contributor to Mortgage News Daily.