Mortgage rates were noticeably higher today despite a late day rally that saw several lenders offer improved rate sheets.  That means that this morning's rate were even higher, yet at that time, the widely-followed weekly report from Freddie Mac characterized rates as "little changed."  While not inaccurate considering Freddie's survey runs Mon-Wed, it's no longer applicable to anyone looking at rates today.

The Freddie survey is frustrated by another aspect of its methodology, which allows for survey respondents to reply any time from Mon-Wed.  This means that the results aren't guaranteed to contain equal representation from Tuesday/Wednesday's rates, which were already on the move compared to Monday.

What Freddie reports as a 0.01% increase in rates week over week has actually been a 0.09% increase on average.  If rate sheets remain at current levels through next Wednesday, Freddie's survey will likely rise by a similar amount.  Bottom line: it's intended to be a "once-a-week" indicator and isn't designed to capture the day to day volatility that's affecting borrowers on the day it's actually released.  Today's rate sheets will make that abundantly clear.

Conforming, 30yr fixed best-execution is edging up to  4.375%, though 4.25% remains viable due to attractive buydowns.  This means that 4.25% may require additional closing costs ("points") to obtain, but borrowers may see this as a better value than 4.375% with no points.  As a reminder, "points" are neither good nor bad--simply a choice between paying more now or more later.  Only you can decide if it's a choice that makes sense for you based on the options your lender provides and your personal preferences. 

Loan Originator Perspectives

"I was concerned about a potential bounce yesterday, and today we got a taste.  In spite of a decent 30 yr auction today which helped erase some of the losses suffered earlier, we never made it back to yesterday's levels. I'm sticking with the mantra: 'you like it- lock it.' Between the economic data and political headlines we have yet to see, there are too many unknowns in the near-term future." -Bob Van Gilder, Finance One Mortgage

"Nice market response to a strong 30 year option today. DC Drama continued amid rumors of a possible debt ceiling increase. While the rally was welcome, it didn't even get pricing back to yesterday's levels. The range is the range until it's not the range anymore.  Though the lack of data and DC drama continue to limit our movements, two out of the last three days have been far less limited--threatening the sanctity of the range." -Ted Rood, Senior Originator, Wintrust Mortgage

Today's Best-Execution Rates

• 30YR FIXED - 4.25% -4.375%
  
• FHA/VA - 4.0-4.25%
  
• 15 YEAR FIXED -  3.375-3.5%
  
• 5 YEAR ARMS -  3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations

• Uncertainty over the Fed's bond-buying plans is causing immense volatility in rates markets and generally leading rates quickly higher 
• Expectations for "tapering" (a reduction in "QE3" asset purchases) mounted over the summer and September 18th was seen as the most likely day for a potential tapering announcement
• But the Fed decided to keep a change in QE amounts on hold until the economy could more convincingly show that rising rates (which had been rising because markets expected the Fed to taper!) wouldn't be too big an impediment to further improvement. 
  
• That's resulted in the first meaningful "pause" in the "rising rate environment" since it began in earnest in May, 2013.   This won't necessarily be an ongoing move in the other direction, and we're nowhere near May's rates yet, but it's a good opportunity to get back in the market if rising rates pushed you out sometime between now and then.
  
• The extent to which that remains true relies on incoming economic data.  Strong data will increase the speculation that the next Fed meeting will contain a reduction in purchases
• (As always, please keep in mind that our Best-Execution rate always pertains to a completely ideal scenario.  There are many reasons a quoted rate may differ from 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).