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Nothing has changed from Friday. Mortgage rates continue to run into a floor at 4.75%. This has held true all month! My lock bias is based on the big picture outlook. Barring a major shift in sentiment that drives benchmark Treasury yields lower, mortgage rates should move higher in months to come. While floating day to day can result in small reductions in borrowing costs, the risk of rates rising is large. This is long term guidance. If you are looking to continuing floating, keep an eye on the stock market. If stocks extend recent weakness I wouldn’t be totally against floating overnight, but again I point out the 4.755 floor we appear to have hit in mortgage rates. On the other hand, if stocks rally, money will flow out of the fixed income sector which would most likely lead to worse mortgage pricing and higher rates. This highlights why we continue to advise locking: the amount of risk associated with floating are not justified by the possible reward. There is still much more room for rates to rise than to fall. ...

I have been using a well defined trading range to gauge my lock/float recommendations. The idea is to lock at the price highs and float at the price lows. On Friday I recommended floating through the weekend, this strategy worked out well as mortgage rates are modestly improved (not big improvements) today. Considering that MBS are holding near the top side of the trading range and as AQ and MG put it, there isn't much room for MBS prices to continue to improve, I have advised a few of my higher loan amount clients to lock in their loans....