Worst 5 Days For Rates Since The Election
Mortgage rates continue rising at an uncomfortable pace for anyone in the market to buy or refinance. Today was the 5th straight day of quicker-than-average movement higher and it leaves the average lender at the highest levels in nearly 2 months.
Whether or not this is as dramatic as it sounds depends on your perspective. While it's true that the past 5 days have been the worst since the US presidential election, it's also true that interest rates are just over an eighth of a point higher during that time. An eighth of a point (.125%) will cost you about 14 bucks a month on a $200k loan. Alternatively, it would cost you $1200-$1600 in cash to get the rate back down to levels from 5 days ago on the same loan amount.
For years, lenders have capitalized on the psychology of "monthly payments." $14/mo doesn't sound like too much when it comes to a $200k home loan. But consider going out of town for a week and coming back to find your closing costs roughly $1400 higher simply to keep the same quote you had last week. For most, the $1400 upfront cost is the more effective way to communicate the true change in cost.
Bond markets and mortgage lenders will be closed tomorrow for the Independence Day Holiday. The safest strategy is to assume the current weakness will continue until we see a definitive bounce.
Today's Most Prevalent Rates
Ongoing Lock/Float Considerations