Mortgage Rates began the week roughly unchanged to slightly higher, keeping them near all-time lows.  This also means that the Best-Execution rate for 30yr Fixed Conventional loans was unchanged at 3.75% with the variations in rates vs last Friday being seen in the form of closing costs/credits.

(Read More: What is A Best-Execution Mortgage Rate? )

(Get Caught Up With: Friday's Post)

Interest rates continue to be driven largely by events in Europe.  With little expected from Greece until elections later in the month, markets are more focused on Spain at the moment where the 2nd downgrade of the month from ratings agency, Egan Jones, pushed the Euro to a new multi-year low today, and helped domestic interest rates hold their ground near recent lows.  

Mortgage Rates and the Mortgage-Backed-Securities (MBS) that most closely direct them, were not able to improve at the same pace as Treasuries today, but that pace was relatively modest in the first place.  Furthermore, when Treasuries are in high demand due to "flight-to-safety" type rallies, they generally have an easier time moving lower than mortgage rates, which we've discussed in the past (read more: HERE). 

In terms of the calendar of potentially market-moving events, the first two days of this holiday-shortened week are fairly light, and are exceptionally light compared to Thursday and Friday.  Several important reports are released on Friday morning including the most important piece of economic data each month: The Employment Situation Report (aka "jobs report" or "NFP" which refers to the headline component of the report: "non-farm-payrolls").  Unlike much of our domestic economic data of late, the Jobs report does have a good amount of market moving potential despite the recent dominance of the European crisis, though the latter should continue to keep domestically-inspired swings to a minimum.

Ongoing Guidance: We'd continue to advocate not trying to "get ahead" of current market movements as a high degree of uncertainty is pervasive.  While it's a reasonably safe assumption that European concerns will generally help rates stay lower than they otherwise would be, that "otherwise would be" part is very much a moving target.  Best bet is to focus on the fact that rates are at their all time lows, and with very close to their all-time low borrowing costs.  Add in the fact that progress has always been increasingly difficult from current levels and risk vs reward for floating vs locking looks a bit larger than we'd like, but not out of the question for those who understand the risks and have an exit strategy if things don't go their way.

Loan Originator Perspective With Rates At All Time Lows

Julian Hebron, Branch Manager, Loan Agent,  RPM Mortgage

Friday's consumer sentiment report from Reuters/UofM was best since 2007. Today's consumer sentiment from Conference Board was the lowest in 4 months. Consumers tend to respond to such surveys based on daily expenses like gas prices. But rate markets respond to more macroeconomic factors. And on that note, we've got flat GDP and jobs market, a long-term eurozone debt crisis (that directly impacts U.S. rate markets), and fiscal paralysis in the U.S. These factors all contribute to low rates. We're already trading near record lows so consumers can be confident they're getting the best-ever rates now. As for whether they'll go lower: maybe a little bit. More on this topic as the week rolls on...


  • 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).