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 advising LOCK all week ahead of the Employment Situation Report, which will be released at 8:30am tomorrow morning. While there have been many whispers for both job losses and job creation, economists are very mixed about the outlook. Worse than expected jobs numbers benefit MBS prices and lead to lower mortgage rates while better than expected data leads to higher mortgage rates. Despite what I believe is a good chance of a bad report tomorrow, I am still advising to lock loans today. If the jobs data is worse than expected, rates could decline, but lenders have proven slow to pass along better rates so there is not much room for rates to fall further. If the jobs number is better than forecast or "on the screws", rates will rise quickly, ESPECIALLY AFTER TODAY'S RALLY. In my opinion, there is little reward and MUCH RISK in floating. Mortgage rates are near their best levels in over a month, still locking.

Reports from fellow mortgage professionals indicate lender rate sheets to be similar to yesterday’s...again. This keeps the par 30 year conventional rate mortgage 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. My lock advice will be the same as yesterday. I feel 4.75% is the bottom we will see with mortgage rates. If you are within 30 days of closing, you should strongly consider locking as we believe mortgage rates will be on the rise in the months to come.

Following the release of much better than expected 4th Quarter GDP, mortgage-backed security prices fell. This forced lenders to move mortgage rates slightly higher early on in the day. That didn't last long though. Around lunch time MBS prices began to improve. After the lunch hour, momentum picked up and lenders started repricing for the better. The par 30 year conventional rate mortgage rate ends the week in the 4.75% to 5.125% range for well qualified consumers. While I am not totally against floating over the weekend, I still can't provide enough justification to ignore currently aggressive mortgage rates, especially after lenders repriced for the better this afternoon.

MORTGAGE RATES MOVED HIGHER AFTER THE FOMC RELEASE. Reports from fellow mortgage professionals now indicate lender rate sheets to be worse than yesterday’s. Lenders continue to offer the best mortgage rates we've seen since early December. While I am tempted to see if rates keep moving higher tomorrow, I think borrowers should still be locking in their loans. Like yesterday, if you want to risk it and continue to float keep an eye on the equities market. If stocks move higher tomorrow, mortgage rates should move higher. The safe call is to take advantage of the recent price gains and lock.

Reports from fellow mortgage professionals indicate lender rate sheets to be worse than Friday. The par 30 year conventional rate mortgage has risen to the 4.875% to 5.125% range for well qualified consumers.These rates are the most aggressive in the mortgage market, only very well qualified consumers will have access to these borrowing costs. To secure a par rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less. These quotes also assume the borrower is willing to pay all closing costs including an estimated one point loan origination/discount/broker fee. Your mortgage professional should be able to provide you with a breakeven analysis to determine the optimal fee vs interest rate. If you didn’t follow our LOCK advice from last week, that means you are still floating today. While lenders were likely conservative today, I am still favoring locking in loans. .

With lenders still offering the best rates we've seen in over a month and further progress unknown in the rates market, I think most should consider locking in their mortgage rate. As I said yesterday, we have picked up significant gains this week, by locking now you take advantage of those gains and remove risks of rising rates. At this point, without a fundamental shift in investor sentiment or the economy, it is going to be very difficult for mortgage rates to move much lower. In my opinion you do not have much to gain by floating. Also like yesterday, I am not totally against floating into tomorrow, but do feel the recent price gains warrant locking in loans. If you do decide to continue floating, you should be re-evaluating your stance on a daily basis.

Reports from fellow mortgage professionals indicate lender rate sheets to be unchanged this morning. The par 30 year conventional rate mortgage remains in the 4.875% to 5.125% range for well qualified consumers, a few lenders are still offering 4.75%, but not many. Last week I advised that I am providing lock float guidance on a very short term basis. In the near term, as in this week, I expect to see only marginal mortgage rate improvements, nothing huge. I am thinking that locking before Thursday will likely be the best strategy (lock before the Treasury announces debt supply later this week). While I am comfortable with a float recommendation into next week, I must share with you that we are very defensive of these mortgage rate improvements. We don't see gains being a long lasting trend. With that in mind, if you are closing in the next month, you should be looking to lock in soon. If you are a "fence sitter" or have an Interest Only ARM that is about to adjust, you should be considering a refinance before interest rates start rising. I hope its obvious how defensive we are...floating one day at a time.