Following the release of the Retail Sales report, benchmark yields rose and MBS prices plummeted. Many lenders released rate sheets at the lows of the day, thus mortgage rates moved higher out of the gates. However, shortly thereafter, benchmark rates began to recover as bargain buyers entered the market at the price lows. Then momentum was added to the relief rally following the worse than expected read on Consumer Sentiment. All MBS prices losses were eventually recovered. This allowed a few lenders to reprice for the better, but not all.

Yesterday I informed you that the most significant threat to mortgage rates was today's 10 year Treasury note auction and the 30 year bond auction scheduled to happen tomorrow. Well, benchmark yields started rising before the auction even occurred! This forced MBS prices lower and resulted in lenders raising mortgage rates early in the day. Higher rates did not reverse course after the auction either, regardless of strong demand.

Reports from fellow mortgage professionals indicate lender rate sheets to be marginally worse when compared to Friday afternoon pricing. However the best par 30 year fixed conventional mortgage rate does remain in the 4.75% to 5.00% range for well qualified consumers. Mortgage rates are more or less holding steady near the lowest levels of 2010 even as benchmark Treasury yields have risen. If you have been sitting on the sidelines waiting to refinance, now is the time. The Fed is about to end its MBS purchase program at the end of the month, while we do not expect mortgage rates to skyrocket, we do anticipate they will move steadily higher.

Tomorrow we get the official government numbers on the employment situation. This is the most influential report offered on a monthly basis. Job creation is crucial to our overall economic recovery; if more people are out of work, there will be less consumer spending. This is bad for corporate profits and our economy. I have been saying all week to lock ahead of this report, I am sticking with that guidance. If tomorrow's report is better than expected, rates will rise and rise quickly. If it is on the screws or slightly worse, mortgage rates will probably hold steady near current levels, even if MBS prices rise. if much worse than expected, rates could dip another .125% for a brief amount of time. With rates holding at the best levels of the year and not much to gain by floating, the wise move is to lock ahead of this report.

It was a very volatile day in the secondary mortgage market. Yesterday MBS prices rose in the morning and fell in the afternoon. Today the exact opposite happened. MBS prices fell at the open and recovered losses in the afternoon. A few lenders even repriced for the better. If your lender has not repriced for the better, mortgage rates are higher compared to yesterday. If your lender did reprice for the better this afternoon, mortgage rates are about the same as yesterday. The par 30 year conventional rate mortgage remains in the 4.75% to 5.00% range for well qualified consumers. To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee. You may elect to pay less in closing costs but you will have to accept a higher interest rate. This is a ideal option for homeowners not planning on keeping your home for more than a few years.

Improvements over the course of the week have led mortgage rates back toward the lows of 2010. While floating is really tempting, if I only had one loan to float, I would lock it. If I had 10 in my pipeline, I would float 3 and lock 7. I am still not convinced lenders will offer mortgage rates below 4.75% in 2010.

Yesterday was the first day in awhile that I advised floating overnight. It paid off today. If you are being offered 4.75% costing 1 discount point, I would lock. If your rate moved lower by 0.125% (in rate, not points), I would consider locking. If your mortgage rate did not move lower today (same as yesterday), it is not likely to rise tomorrow even if MBS prices fall, so it is worth it for you to float overnight. I do think interest rates moved a long way in a short time today, with that in mind I am more nervous about letting these gains stay on the table for long. If this becomes a trend I will be more willing to let improvements ride out a few more days.

Reports from fellow mortgage professionals indicate higher rates this morning. The par 30 year conventional rate mortgage is in the 5.00% to 5.25% range for well qualified consumers. To secure a par rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee.