Wow, what a day for mortgage rates.
Today the market opened up strong on news that the Fed would be purchasing Mortgage Backed Securities in an attempt to help stimulate the housing market. Needless to say, the Fed's action caused a significant rally in the bond market which led to mortgage rates taking a serious nose dive. Rates for clients with the best credit, equity, an escrow account for taxes and insurance and standard closing cost (approximately $1500) were as low as 5.375%. The end of the day brought a sharp turn around and we saw mortgage rates finish the day in the neighborhood of 5.750% for clients who meet all of the criteria shown above.
Like the stock market as of recent, we are seeing an incredible amount of volatility. The rip saw effect of today's mortgage rates goes to show how in one day rates can drop significantly, only to turn right back around and go the other way. While the end of the day rate is a nice improvement over yesterday, it is a significant increase over the days lows.
I suspect given the holiday we will see little movement on Wednesday and Friday. Next week will likely give us the best indication on where rates are headed. We truly are in a unique time in history. For clients where it makes sense to do a no closing cost refinance, we are recommending doing so. If rates drop again, you can always refinance again with no to low cost. Keep in mind that a no closing cost refinance results in rates slightly higher than the general market depending on credit, loan size, equity and other loan characteristics.
Make sure to bookmark this page and check back often as I will keep it updated with market developments.
