Mortgage rates for the day starting October 29 headed south rather than up as hoped for the week earlier. The unexpected closure of the markets due to Hurricane Sandy on the east coast as well as a lack of movement on economic reports that came out today contributed to the weakness in any kind of increase support.
Market watchers had hopes for a rise given the activity on the bond markets that was seen overnight in Asia and the Europe, however the trend didn’t seem to carry over to American markets today. Instead, domestic rates and demand for mortgage-related securities pretty much remained stagnant when the trading day ended despite some interim volatility.A noticeable change given the events from last week triggered lenders to put out adjusted rate grids for conventional loans. On the 30-year fixed mortgage the rate average drooped to 3.375 percent, down from a 3.5 percent previous level. Some lenders held back on putting out any new changes and some even pulled back on offering any kind of rate lock benefits. This sort of behavior is expected to continue into the middle of the week.Loan originators see plenty of potential for business given the continued low rate level. However, investors hoping to make valuable interest rate gains on mortgage investments and mortgage-backed securities probably won’t be seeing much in the way of promise again anytime soon. Again, the one movement originators are doing to allow for rates to rise and increase profit is holding back on lock options. This forces consumers to grab a rate immediately or take the risk of a rise, which of course works better in the favor of a lender’s profit margin should rates go up.
So, as noted earlier, October 29 saw 30-year fixed loans averaging 3.375 percent and 15-year fixed loans staying the same as last Friday at 2.875 percent. For those considering a more flexible model, 5-year ARM loans were offered today in a range between 2.625 percent and 3.25 percent.
A number of mortgage brokers and lenders are marketing refinancing to consumers right now, especially with the HARP II program in play currently. Much of the pitch focuses on an expectation that after the election rates will rise again. However, the current outlook for October 30 sees a flat behavior over the next few days, at least until the actual election is over November 6.