Mortgage rates made the jump back up to their highest points in a month on Wednesday. That said, the range of rates has been fairly conservative across the monthlong span, making Tuesday’s final averages the highest in the last month as well. Typical lenders are quoting 30-year, fixed-rate loans at 3.75 percent in top-tier scenarios. Some lenders were a tad more aggressive this week, going down as low as 3.625 percent, but bounced back up to join the average on Wednesday.
“Our ‘potential’ rally yesterday is now in the rear view mirror,” said Ted Rood, a senior originator with Wintrust Mortgage. “Pricing worsened this morning, and a tepid Treasury auction compounded the losses. Rates are now solidly at their highest since late January. It’s times like these that remind originators and borrowers not to get greedy by floating locks too long. I’m in ‘lock early’ mode. The trend is no longer our friend.”
The lower rates earlier in the week were probably just an opportunity for investors to close out their trading positions prior to Thursday’s announcement from the European Central Bank. Mortgage rates are always determined by bonds in the long-run, and traders have been anticipating rates moving higher. That anticipation was nullified on Tuesday as the ECB moved toward its Thursday announcement.
Mario Draghi, president of the ECB, indeed announced a rather dramatic increase in the bank’s stimulus plan, increasing its quantitative easing programme from €60 billion to €80 billion per month. More relevant, the bank cut the main interest rate from .05 percent to zero. No signs yet on how this will impact bonds, but the best bet is to stay on the defensive side of things.
Locking down a rate in the next 30 days may still play to your advantage as things are still looking to go higher before they go lower.
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