Mortgage rates moved slightly lower to end the week after having risen to the highest levels of the month yesterday.  That was part of a two day slide following Wednesday's FOMC announcement and an extension of weakness beginning with last Friday's Employment Situation Report.  Conventional 30yr Fixed Best-Execution remains solidly at 3.375% and in some cases, eased back to 3.25% in certain scenarios. 

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

The pace of market movements today was incredibly subdued.  Heading into today's trading session, there was some risk that bond markets had embarked on a path higher in rate, but tempered by the the hope that Thursday's scariest levels would mark some sort of turning point.  Although there's never any way to know how things will move in the future, we've at least seen that rates aren't in the midst of any sort of unrestrained break higher.  In other words, the forces pushing and pulling on mortgage rates continue to be more balanced than lopsided.

On a final note, keep in mind that all of the recent movements have happened in very small range compared to the months and years before the Fed announced the mortgage-specific QE3 in September.  We've had ups and downs since then, but they've been progressively smaller in magnitude.  What's discussed today as "battling back from recent highs" would barely scratch the surface of some of the more volatile weeks earlier in the year.

Loan Originator Perspectives

"Rates will dip as we go over the cliff. Next week will be a good locking week and after Christmas as well I think. Stocks will take a gut punch and then we'll get a deal. Taxes will rise on the top 1% raising negligible revenue and the budget cuts will amount to shaving your 5 o'clock shadow. No growth so no jobs so no rate increases next year. " -Mike Owens, Partner with Horizon Financial, Inc.

"Conventional "end of the year market movements" have fallen by the wayside this year between Fed purchases and fiscal cliff shenanigans. I don't place much value in "rates did this in Dec last two years, so will this year" logic anyway, and the markets are certainly in a unique circumstance at the moment. I am locking the majority of my deals, rates just too good to gamble at this point. If we saw several days of rate increases, I might be more liable to float until rates came back, but for now I'm taking the Fed's Christmas present while it's here!" -Ted Rood, Senior Originator, Wintrust Mortgage.

Today's Best-Execution Rates

  • 30YR FIXED - 3.25-3.375%
  • FHA/VA - 3.25% (varies more between lenders than conventional 30yr Fixed)
  • 15 YEAR FIXED -  2.875% - 2.75%
  • 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
  • This 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).