Mortgage rates are somewhat higher to begin the week, continuing a bounce back from better levels seen immediately after Friday's weak employment report.  Friday morning's rate sheets were in line with the best of the week, but markets began to deteriorate into the afternoon prompting some lenders to adjust rate sheets.  There's not a lot of additional weakness today, but what little there is, has led to slightly higher rates.

Despite the weakness, the prevailing Best-Execution rate for 30yr Fixed Conventional Loans remains unchanged at 3.5% with the changes in pricing being limited to the COSTS involved in obtaining that rate.  In some cases, these costs can be "negative" meaning that lenders could pay some closing costs.  In those cases, today's weakness just means lenders may not be able to cover as much of the closing costs as Friday, though the rate should be unaffected.  In cases where a borrower is paying the costs up front, they would be slightly higher today vs Friday, and have a similarly unchanged rate.

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

With markets essentially languishing sideways, there's an increased focus on the headline events for the week which occur on Wednesday and Thursday.  Although the time in between could go either way, the presence of those bigger-ticket events later in the week should serve to keep the range relatively narrow.  This doesn't mean rates couldn't be higher tomorrow, simply that the bigger moves are more likely to arrive on Wednesday and Thursday.  It should be noted that Thursday's events occur well after rate sheets are out, so Friday morning's rate sheets have the greatest potential for deviation from current rate sheets.

Long Term Guidance: We'd continue to advocate against trying to "get ahead" of current market movements due to the high degree of uncertainty.  The long-term direction of rates has been down, down, down, for the past year.  At some point, this will turn, and when it does, we highly recommend that you're prepared by drawing your OWN line in the sand as to how much rates would have to rise before you lock at a lost.  That's assuming you don't simply lock as soon as you're able.  For those with lower levels of risk tolerance who would consider movements in cost (despite unchanged interest rates) to be significant, or for those within 15 days of closing, or who are purchasing, this certainly favors locking.  We'd also consider that rates remain very close to all-time lows and uncertainty to all-time highs.  This also favors locking.

Loan Originator Perspectives

Bob Van Gilder (BVG) Finance One Mortgage

Be vigilant if you are currently floating your interest rate. Although the bias is towards more FED help. A surprise could leave you feeling like a spurned prom date.

Ted Rood, Senior Loan Officer, BankStar Mortgage

We're seen some sudden, large pricing swings in the past few weeks and this week may be prone to them as well. Advising my clients to lock IF they're happy with the current pricing, rather than gamble on remarkable rates improving further. Make no mistake, in this economy it's better to take the money on the table than roll the dice too many times.


  • 30YR FIXED -  3.5%
  • FHA/VA - 3.5% (varies more between lenders than conventional 30yr Fixed)
  • 15 YEAR FIXED -  2.875-3.00%
  • 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
  • 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).