SoCal Mortgage Blog

After yesterday's FOMC Announcement, Mortgage Rates moved to all time lows. The rally in bond markets extended overnight and throughout today's trading, resulting in rate offerings improving even more.

Please keep in mind that lenders simply cannot move mortgage rates lower at the same pace as a rapid rally in Benchmark Treasuries. Although you might hear talking heads on TV or read articles saying that mortgage rates are tied to Treasuries, THEY ARE NOT, and you'll be perennially frustrated if you expect them to be. This is explained in greater detail HERE.

Today's Rates: The current market is in a state of flux at the moment and mortgage rates moving up and down around ALL TIME LOWS. And we may have hit the wall.  Simply put there's no secondary market for rates any lower than 3.875% on a 30YR fixed right now. For similar reasons, 15 year fixed conventional loans may be stuck at 3.25%. The secondary market factors driving adjustable rate loans are in a massive state of flux, but one that is mixed between positive and negative. 5 year ARMS remain near 3.125%, but with variations from lender to lender. Bottom line, adjustable rates aren't participating in this rally to the same extent as fixed rates. (Rates referenced are for loans $417,000.00 or less) 

GUIDANCE: Today's guidance is all about the risk of "pipeline control" price changes among lenders. Regardless of what happens in markets, be they Treasuries or the Secondary Mortgage Market, lenders can still only write loans to the extent allowed by their capacity.  So whether it's to avoid "fall out" or to avoid capacity issues, there's an elevated risk right now of lenders RAISING RATES without warning, even if the underlying market movements would NOT suggest it. If you remember "the wall" that existed for a long time in loan pricing moving from a 4.75% BestExecution to 4.625%, the same underlying problems will make it a slow, difficult process to move now, and one that might not happen at all. If you've been waiting for an opportunity to lock in the high 3's - low 4's (depending on your scenario), now is that time!