Jonathan Burdick

Senior Loan Consultant, NMLS #1045837 – Fairway Independent Mortgage Corp.

Jonathan Burdick

Best Day for Mortgage Rates in Well Over a Month

Best Day for Mortgage Rates in Well Over a Month

Dec 1 2015

Mortgage rates had their best day in over a month today.  It was also the first day with any legitimate movement in nearly three weeks.  Over that time, rates have been sideways to slightly lower, with the average lender continuing to quote conventional 30yr fixed rates of 4% on top tier scenarios.  Today’s improvement brings several lenders back into the high 3’s, though the majority aren’t quite there yet.  Still, in the cases where today’s quoted rate is the same as yesterday’s, the upfront costs should be appreciably lower (or lender credit should be higher).

We can chalk today’s movement up to several factors.  Most overtly, a key manufacturing report was quite a bitweaker than expected.  Weaker economic data tends to benefit the bond markets that dictate mortgage rate movement, but that alone wasn’t enough to explain today’s drop.  Unfortunately, the other pieces to this puzzle are more esoteric.  They involve things like the bond market trading dynamics surrounding the beginning of a new month.

To oversimplify, there can often be some pent up pressure to buy or sell bonds on the first day of the month.  Today that pressure happened to go in our favor.  The rest of the week will likely be more dependent on the economic data and the plethora of speeches from Fed officials.

Loan Originator Perspective

“What a surprise today has been.  I was expecting bonds to pull back some due to the new month and the upcoming jobs report on Friday.   However, the opposite has happened and bonds are having a terrific day.   I am not convinced that this is the start of a long rally, so I think it would be wise to lock if you are within 30 days of funding.  These gains can disappear very quickly.  If you plan to lock today, it would be wise to wait as late as possible to allow your lender the time to pass along the improvements.” –Victor Burek, Churchill Mortgage

“If you locked yesterday and saw rates improve today don’t beat yourself up.  Things could have easily gone the other way if the ISM data came in above expectations.  Moving forward we may see the lift in bond prices continue making floating a strong consideration.  ” –Manny Gomes, Branch Manager Norcom Mortgage

“Rates rallied today, somewhat surprisingly, as bonds posted their largest gains in the past two months.  Whether the motivation was tepid economic data or traders consolidating their positions, we’ll gladly take the improvements, especially if they don’t evaporate as fast as they appeared.  Days like today make for a tough lock/float call.  I’ll lock some floating deals, especially those within 30 days of closing.” –Ted Rood, Senior Originator

Reference Mortgage News Daily


Jonathan Burdick NMLS 1045837

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