Mortgage Rates Officially Hit Three-Year Lows

Mortgage rates crept just barely lower on June 10, but it was enough to leave the average lender’s rate sheet in its best shape since May 2013.

Unlike the early February time frame, rates have moved lower in a steadier way, according to Mortgage News Daily. Although that doesn’t mean they can’t bounce higher, it does mean there’s less risk of a major increase without a major calendar event causing it. In February, rates bounced higher at the fastest pace of the year simply because they moved so much lower so quickly.

With that said, there are some major calendar events on the horizon, and if you don’t want to risk losing current rates, you should be aware of them. The first is the Fed Announcement in June, and here are some related lock/float considerations:

• Markets are primarily concerned with the timing of the Fed’s second rate hike (after the first hike in December 2015).

• After bottoming out fairly close to all-time lows in February, rates have been in an increasingly narrow range just above all-time lows.

• Fed hike expectations come and go, creating volatility within that low, narrow range. Things won’t get serious until we actually break out of that range.

• After fears increased that the Fed would hike in June, the current consensus is that they’ll hold off until at least July. This has helped rates move back toward the lower end of that long-term range. These have historically been good locking opportunities in 2016 (because rates tend to rise back toward the higher end of the range shortly after hitting the lower end). That trend won’t continue forever, but until it is broken, it provides a useful way to know how advantageous current rates are, relative to other recent offerings.

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