Rates and market update

After experiencing a scary setback earlier in the week, home loan borrowing costs improved again today as a "flight to safety" continued to benefit bond yields.

A "flight to safety" happens when investors are nervous about owning risky assets like stocks, but do not want to miss out on earning a return on their funds, so they allocate their money into risk-free government guaranteed U.S Treasury debt to provide a safe-haven and an investment return. As benchmark Treasury yields fall on "flight to safety" buyer demand, prices of mortgage-backed securities move higher in unison. This allows lenders to reprice their rate sheets for the better and gives originators an opportunity to offer fence-sitting borrowers lower mortgage rates or more competitive closing costs.

The "Best Execution" conventional 30-year fixed mortgage rate is 4.50%. Some lenders may be quoting 4.50% with increased closing costs in the form of origination fees. Some lenders may also be quoting 4.375%, but those offers will definitely carry additional closing costs. These costs could be worth it to applicants who plan to keep their new mortgage outstanding for long enough to break even on the extra up front costs.


30 year fixed - 4.50% - 0 points for rate
20 year fixed - 4.250% - 0 points for rate
15 year fixed - 3.625% 0 points for rate
10 year fixed - 3.250%
5/1 ARM - 2.75% - 0 points for rate
7/1 ARM - 3.250% - 0 -points for rate
Jumbo - over 729,000
30 year fixed - 4.99% 0 points for rate
15 year fixed - 4.50% - 0 points for rate
5/1 ARM - 3.50% - 0 points for rate
7/1 ARM - 4.00% - 0 points for rate