Mortgage rates were sideways for the most part today, keeping the most prevalently quoted conforming 30yr fixed rates between 4.0 and 4.125%.  After bond markets made it through this week's Treasury auction process (which happens every other week, in general, and can restrain positivity to a small extent), trading levels improved and several lenders have released positive rate sheet revisions.  But even then, the improvement seen on rate sheets didn't measure up to the improvement in the mortgage-backed-securities (MBS) that most directly affect lenders' rate sheets. 

This isn't altogether uncommon, especially when MBS improve late in the day as was the case today.  The tacit implication is that rates can improve even if markets merely hold steady tomorrow.  That's a fairly big "if" considering the week's most important economic data comes out in the morning, but all things being equal, markets have shown that they're at least receptive to the idea of reversing recent trends.

Loan Originator Perspective

"Now that auctions are behind us, it turns out we've started to see a bit of a "relief rally" where treasury and mortgage buyers arise after so much supply has moved through the system. At this point, while MBS have rallied a little, I've seen little to none of it passed along to rate sheets and consumers. For that reason, I'd float at least into Friday to see if the rally continues and the gains are passed along." -Brent Borcherding, brentborcherding.com

"We started the day on the right track and received a decent boost from the end of this week's auctions heading into the closing hour. Short term technical levels are still in play as we are in the middle of the recent range. In my opinion this creates a safe area to float your rate in anticipation of getting closer to a 15 or 30 day window to lock in. Outside of that approach it is very difficult to confidently state that we should see a significant enough drop in rates that warrant floating at these levels. Floating today is about buying time and reducing costs, not banking on a much better rate tomorrow." -Constantine Floropoulos, Quontic Bank

"With the final auction of the week out of the way, the much hoped for relief rally is kinda happening. Once the final auction results were released and the initial reactions given time to play out, MBS have moved to the highs of the day. With MBS improving, I would advise to float all loans overnight and re-evaluate pricing in the morning." -Victor Burek, Open Mortgage

"Today's bond auction was not well received and yet mortgage bonds were able to mount a small rally. This can be seen as a sign the selling may have slowed down or possibly halted for the time being. Tomorrows trading will be more telling but for now floating carries less risk." -Manny Gomes, Branch Manager Norcom Mortgage

Today's Best-Execution Rates

• 30YR FIXED - 4.0-4.125
  
• FHA/VA - 3.5-3.75
  
• 15 YEAR FIXED -  3.25
  
• 5 YEAR ARMS -  3.0 - 3.50% depending on the lender

Ongoing Lock/Float Considerations

• The hallmark of 2014 has been a narrow range in rates.  Too many market participants bet on rates going higher in 2014, and markets punished that imbalance with a paradoxical move lower.
  
  
• European markets helped that process along and continue to play a prominent role in keeping US rates lower than they otherwise might be.  

• For most of the Summer and early Fall months, rates held a narrow range of 4.125% -4.25% (essentially where the 2014 rate recovery has bottomed out) and finally broke to a 3.875%-4.0% range in mid-October.  It's too soon to tell if this is a brief window of opportunity or the continuation of 2014's very gradual improvements.
  
  
• As always, please keep in mind that the rates discussed generally refer to what we've termed 'best-execution' (that is, the most frequently quoted, conforming, 30yr fixed rate for top tier borrowers, based not only on the outright price, but also 'bang-for-the-buck.'  Generally speaking, our best-execution rate tends to connote no origination or discount points--though this can vary--and tends to predict Freddie Mac's weekly survey with high accuracy.  It's safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie's once-a-week polling method).