Mortgage rates rose moderately today.  Market conditions were exceptionally quiet and after trading opened in the secondary mortgage market, there was almost no movement for the rest of the day.  This follows 2 days at the end of last week that also realized very little of their rate-movement potential, though they did see some volatility.  Unsurprisingly, that leaves rates very much in line with Wednesday's--the day before the volatility showed up.

In other words, financial markets braced for bigger impact from last week's European Central Bank Announcement and the Employment Situation report.  While there was a decent amount of back and forth movement, rates ultimately leveled off as if those events never even happened.  The most most prevalently quoted conforming 30yr fixed rate for best-case scenarios (best-execution) is back to 4.25% with today's weakness, though 4.125% remains close.  Some borrowers will still see the same rate as was quoted Friday, but with higher closing costs.  The increase equates to 0.04% in terms of rate.

Last week's conclusion holds true: the inspiration for the next concerted market movement is anyone's guess at this point.  It's not safe to plan on rates moving in either direction in the short term, but recent levels of volatility suggest there's not much risk in being wrong.


Loan Originator Perspective

"I feel that locking is the safe move since we are inching higher in rate. Easily .25% higher than just 2 weeks ago. No sense giving up more." -Michael Owens, VP of Mortgage Lending at Guaranteed Rate, Inc.

"Last week brought us highly anticipated events including Thursday's ECB announcement and Friday's NFP Jobs Report.   These both managed to be almost perfectly in line with the market's expectations, leaving very little movement for rates compared to what might have been.    If your loan is closing in less than 30 days, continue to cautiously float at the moment, but if rates move any higher from this neutral zone (in terms of 10yr Treasuries, 2.62%), I'd strongly consider locking." - Justin Dudek, Senior Loan Officer, Supreme Lending

"Rates were a bit higher today and have now hit the top of what I believe to be the current range. Should this be the case floating will help us to capture better rates down the road. However we do have Treasury auctions this week which may add to the volatility. When the market has an equal chance of going either way I recommend to Float if your bold but Lock if your not." -Manny Gomes, Branch Manager, Norcom Mortgage

"A sedate to boring day in MBS Land today as rate markets slumbered through the day with slight losses. Current pricing is still decent, particularly on shorter term loans. Hard to get excited about floating loans within 30 days of closing. Those with longer time frames (and at least a moderate risk tolerance) may consider floating, but I'd be ready to pull the trigger at a moment's notice." -Ted Rood, Senior Mortgage Planner,


Today's Best-Execution Rates

  • 30YR FIXED - 4.25%
  • FHA/VA - 3.75%
  • 15 YEAR FIXED -  3.375%
  • 5 YEAR ARMS -  3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations

  • The Fed has stayed the course on their $10bln per meeting reduction in bond buying, though markets have handled it relatively calmly compared to the days of "coming to terms with tapering" in 2013. 
  • Rates fell significantly in January, leveled-off in February and took choppy steps higher in March.  From there, they settled into a flat range mostly consisting of 4.375 and 4.5%, but with occasional forays to 4.25 and 4.625%. 
  • The bias had been very slightly toward higher rates, it reversed course in early April as expectations grew concerning European Central Bank easing.  On several occasions, those expectations would go on to overwhelm domestic economic data--normally the main source of guidance for market movements.
  • As of the third week in May, rates were as low as they've been since June 2013, more than confirming a break below the 2014 range.  They remained in that range through month-end and grew more volatile ahead of the June 5th European Central Bank Announcement.
  • Looking back at recent movement, it's had a disconcertingly small amount to do with 'normal stuff' like economic data and Fed policy.  Temporary and unpredictable factors currently account for too much of the movement to make firm bets on rates moving either direction in the short term.
  • (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).