BY: MATTHEW GRAHAM
Mortgage Rates Back to Recent Lows
Sep 25 2014, 3:55PM


Mortgage rates fell back in line with recent lows after a disconcerting move higher yesterday.  In general, rates are still in the process of battling back from their worst few weeks of the year.  Weakness during the first half of September resulted in the most prevalent conforming 30yr fixed quote moving up to 4.25% for top tier borrowers.  On Tuesday of this week, that rate was close to returning to 4.125% until yesterday derailed the positive momentum.  And now today, lenders are back to their best rate sheet offerings in more than 2 weeks, making 4.125% nearly as common as 4.25% again.

The most important question regarding September's previous weakness was whether or not it was merely the beginning of a big ugly move toward significantly higher rates.  This week has gone a long way toward ruling that out.  At the very least, when rates pull back from recent highs like this, it creates some breathing room.  Reason being: those inclined to float can set a line in the sand near those recent highs and plan on locking if rates move back up.


Today's Best-Execution Rates

30YR FIXED - 4.25
FHA/VA - 3.75-4.0%
15 YEAR FIXED -  3.375-3.5
5 YEAR ARMS -  3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations

The hallmark of 2014 so far has been a disconcertingly narrow range in rates.  Too many market participants bet on rates going higher in 2014, and markets have punished that imbalance with a paradoxical move lower.

As of June, rates are now lower year-over-year, but that's mostly due to rates' path higher in 2013.  The current path in 2014 remains sideways, though it has recently approached (but not broken) the lows set in late May

European markets continue to play a prominent role, generally helping rates in the US remain lower than they otherwise might be.  

From a wider point of view, we're in limbo, waiting for the first significant move away from the narrow range.  While top tier rates moved up an eighth of a point in early September, to truly move out of the "narrow range," we'd need to see another .125% higher (best-execution at 4.375%)