Mortgage rates took a few more steps in the right direction today and have now made it back to levels not seen since the beginning of June.  Only the first 2 days of the month were any better.  That said, the month began with a quick jump to the highest rates in more than 8 months, and they've only been falling gradually since then.  Today's improvement was a bit bigger than some recent examples.  In many cases, the more aggressive lenders are back to quoting conventional 30yr fixed rates of 4.0% on top tier scenarios, though 4.125% is still slightly more prevalent.

It's never a bad idea to lock in gains when rates are near 3-week lows after hitting long term highs.  It will always be the case that rates could continue lower.  To be fair, they are showing more resilience in this move back from June's highs than they did back in May after the first big leap higher.  Indeed, there is always a chance that "this bounce" is better than "that bounce."  But if we want to talk in certainties and facts, the fact is that rates are still technically in an "uptrend" in 2015.  They could even go a bit lower from here without that uptrend being called into question.  That means floating continues to be more risk than it's worth, although that outlook could soon be changing if next week brings more improvement.

Loan Originator Perspective

"Mortgage Rates improved again, today, and I personally am suggesting to lock in the gains. It's the safest smartest move. I continue to believe that we have not seen significant confirmation that rates are moving lower, and until then, locking remains the best policy." -Brent Borcherding,

"Bonds have extended their gains this morning and look to be breaking a key level of resistance around 2.28 on the 10 year. Closing below that level would be quite positive; however, floating this weekend remains risky. If there is any kind of debt deal with Greece over the weekend, I suspect all the recent gains will evaporate rather quickly Monday morning giving you no time to lock in as the damage will be done prior to lock desks opening. If we get no Greek deal over the weekend, rates should hold or improve further. So, if you think no Greek deal, floating will pay off as lenders still have't passed along the recent gains. If you think there will be some kind of deal, then locking today would be the best choice." -Victor Burek, Open Mortgage

"Since Wednesday we've had a nice rally in rates but it doesn't appear to me that there is anything indicating this is a sustained rally. Greece defauilt fears continue to be a wild card but if it were trully a big deal for the bond markets things would probably be a lot more volatile. I would be taking a day like today where we see improvement as a chance to lock in and protect pricing now. Until there is evidence we have something else in play to create sustained momentum lower I would continue to be in a mode of locking interest rates." -Hugh W. Page, Mortgage Banker, SeacoastBank

"It has been overwhelmingly frustrating week to week as the seesaw effect on interest rates has been nothing less than nauseating. We are in the midst of dangerous territory as technical levels, fundamentals/data, and headlines from abroad can snap the market in either direction. Unfortunately the room for better rates is far less than the opposite. I would take advantage of any dip, including today. For clients with more time to close and an appetite for risk, I would wait to see what next week brings. This market is too unpredictable." -Constantine Floropoulos, Quontic Bank

Today's Best-Execution Rates

  • 30YR FIXED - 4.125%
  • FHA/VA - 3.75
  • 15 YEAR FIXED - 3.25-3.375%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • 2015 began with a strong move to the lowest rates seen since May 2013.  The catalyst was Europe and the introduction of European quantitative easing.

  • It's a highly uncertain time for global financial markets.  There is much debate over whether or not the global economy is turning a corner, thus justifying a widespread move to higher rates.  That's made 2015 significantly more volatile than 2014 for markets.  This means lender rate sheets may change appreciably from day to day, and sometimes even several times in the same day.
  • Bottom line: European Quantitative Easing helped push global rates to all-time lows in April.  Now, the big risk for mortgage rate watchers is that we might have turned a long term corner.  That risk is being compounded by speculation about the Federal Reserve raising rates by the end of 2015.

  • May and June have amounted to the 2nd major move higher bounce so far this year.  Every time this happens, we have to consider the possibility that this will be a big-picture, long-lasting correction.  Until such a thing can be ruled out, Locking makes far more sense. 

  • 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, conventional 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).