Mortgage Rates hit new all-time lows today.  In most cases, lenders' offerings are just slightly better across the board than they were in late January, the last time we officially noted "new all-time lows," though some lenders are not quite back to their previous best levels.  A much weaker-than-expected reading on a widely followed report on business conditions in the mid-Atlantic region gave rates markets a bit of an early jolt lower.  From there, an absence of additional data gave way to technical momentum, helping rates even lower.

Markets are facing tremendous uncertainty over the eventual outcome of Greek elections in June as well as the fate of the Spanish banking sector.  Today, Spain saw their own version of the "run on banks" that occurred in Greece yesterday, reminding traders that, even if Greece makes it out of this mess still in the Euro-zone, that there are bigger fish to fry.  

All that uncertainty has investors piling into safe-haven assets.  In a global economy where a currency as massive as the Euro is in serious trouble due to problems in one small Euro-zone country, investors are just looking for a safe place to park their assets.  US Treasuries have been one such place and their recent rally benefits other products in that same medicine cabinet, such as MBS (the "mortgage backed securities" that most directly influence rates).

Apart from Europe, there's also the consideration of Fed policy in the US.  Whether or not the Fed extends recent quantitative easing measures or embarks on new ones is a matter of great concern to bond markets.  At the last policy announcement, the door was left open for additional easing as-needed, and yesterday's "minutes" from that policy meeting essentially confirmed that open door.  Markets perceive that "as needed" bit as becoming more and more "needed" if the Fed sees signs in the domestic economy like the one seen this morning's weak data.  So when investors think the Fed is more likely to buy more fixed-income investments, rates stay low or move lower, all other things being equal. 

Any way you account for the causes, the bottom line is that mortgage rates are lower.  We'd probably say that 3.75% is the new Best-Execution for 30yr Fixed loans over the past few days and really cemented that today.  Keep in mind, of course, that while we generally think Europe will continue to weigh on markets, keeping rates fairly contained in this new, low range, that "cement" can always be broken if sufficient force is applied.  We're fond of mentioning the increasing barriers to improvement at current levels.  We don't think rates can't improve, just that it will be slow going, and with risks of periodic bounces back.  

Loan Originator Perspective With Rates At All Time Lows

Alan Craft, Loan Officer at Integrity Home Loan of Central Florida

These are the best rates we have ever seen. No reason not lock and take advantage. Is it possible they could go lower? Yes it is possible, but I feel there is a much better chance of worse than better.

Ted Rood, Senior Mortgage Consultant, Wintrust

The biggest drawback to falling rates (as we've seen for a while now) is that borrowers can be lulled into a false sense of security. It doesn't do a borrower any good to stay at a high rate with the hope of getting a new rate 1/4% better than has ever been available. In the equities market, trying to time stock prices to buy at the absolute lowest price is called "catching a falling knife", and it applies to mortgages as well. If you're at a high rate now, and can profit from a refi today, waiting costs you money since you're continuing to pay a higher rate than necessary. In my experience, catching falling knives is not a fun thing to do!

Mike Owens, Partner with HorizonFinancial, Inc.

I've always been a lock it and play it safe originator, but right now I'm 50/50. Rates just keep edging down and I'm actually going to floating short term just to see what plays out. The lock trigger is ready in case, but floating seems safe for now.

Matt Hodges Loan Officer,  Presidential Mortgage Group

The mortgage market is really intriguing right now. Rates have been in slow decline over several weeks, yet there's a persistent fear of a spike upwards with any positive news. Meanwhile, we keep wondering "Where/when will 3.5% or lower be readily available for clients with 0 points?" Volatility and volume have limited the improvements. For the time being, at 30 days or less to closing, lock bias is firmly in place.

Jason York, Vice President of VA Operations at Prime Mortgage Lending, Inc

With where we currently are, I am locking loans that I would typically continue to float.

Kent Mikkola, Mortgage Consultant ,  M & M Mortgage, LLC #213677

Improving rate environments tend to lull us into a false sense of security and often 1 day can wipe out the gains that were made over several weeks. As they say, "a bird in the hand..."

Jeff Statz Mortgage Advisor,  Network Funding, L.P.

Locking most now...stay vigilant for pricing to hold for FHA 6/11 Streamline changes



  • 30YR FIXED -  3.75%
  • FHA/VA -3.75%
  • 15 YEAR FIXED -  3.125 edging down to 3.00%
  • 5 YEAR ARMS -  2.625-3. 25% depending on the lender

Ongoing Lock/Float Considerations 

  • Rates and costs continue to operate near all time best levels
  • Current levels have experienced increasing resistance in improving much from here
  • Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
  • But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.
  • (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario.  There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).