Rates Are Hot

Like yesterday, early morning weakness in the MBS market led to slightly worse rate sheets at the beginning of the day. However as the day progressed, MBS prices rallied enough to allow many lenders to reprice for the better. This brought us back to where we ended the day yesterday. The par 30 year conventional rate mortgage remains in the 4.75% to 5.00% range for well qualified consumers. I still say you should be locking ahead of the employment report coming Friday. If the numbers are better than expected or even not as bad as expected, rates will likely move higher. FAST. If the report comes in as expected or worse, I do not feel lenders will be passing along much lower mortgage rates. Nothing to gain, much to lose in my opinion. Still locking. BY: VICTOR BUREK

After making marginal improvements yesterday, the interest rate market gave back all gains in the overnight session. This weakness was then supported by better than expected housing and industrial production data as well as a generally better outlook from the FOMC minutes. On top of that, stocks improved on the day. All of these factors combined to push mortgage rates higher at the open, and then even higher this afternoon as lenders repriced for the worse. – Victor Burek

Last Friday, although mortgage-backed securities prices did move higher, the improvements did not lead to reprices for better as banks were reluctant to pass along better mortgage pricing with a long 3-day weekend ahead. U.S. markets were closed yesterday in honor of President’s Day. The only economic report to hit the news wires this morning was the Empire State Manufacturing Survey. Each month, the New York Federal Reserve conducts a survey of approximately 175 manufacturing executives in New York State on the strength of business conditions. Readings above 0 indicate expanding or improving conditions while readings below 0 indicate contraction. This data has indicated steady improvements since August of 2009.The New York Fed reported that manufacturing conditions continue to improve, coming in at 24.9. This was much better than what economists had expected. Despite that, the bond market had very little reaction to this lower tier report. However in the lunch hour MBS prices began to rally and a few lenders even passed along lower mortgage rates.Reports from fellow mortgage professionals indicate lender rate sheets to be slightly improved from yesterday, which were pretty much the same as Friday. The par 30 year conventional rate mortgage remains in the 4.875% to 5.125% range for well qualified consumers. There are however a few lenders offering 4.75% at par, but that will require discount points be paid by the consumer. To secure a par interest rate 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. This is ideal for any consumer not planning on keeping their home for more than three years – by: Victor Burek