Mortgage rates maintained recent sideways momentum today, holding inside a narrow range established last week.  This range is particularly interesting to mortgage rate watchers because it is very much in the middle of 2 distinct zones.  One of those zone is the recently-achieved lows.  Technically, these were the lowest levels in more than 2 years, but the best few hours were very close to all-time lows.  

The other zone is still far from being considered "high"--except inasmuch as we could say 30yr fixed rates were in the "high 3's"--but it is a range that we've spent quite a bit more time in recently.  More problematically, moving back into the "high 3's" zone would make it look like rates had officially bounced at those multi-year lows and would now be heading steadily higher.  The verdict can't be rendered until we see more decisive movement higher or lower.

For now, the most prevalently-quoted conventional 30yr fixed rate remains 3.625% on top tier scenarios.  Some of the less aggressive lenders are back up to 3.75%, but that was the case as of late last week as well.  

Loan Originator Perspective

"Another day of consolidation, supply vs demand, and limited data.  Tomorrow brings more data, perhaps more supply in the form of corporate issuance, and perhaps more consolidation.  The current range is very tight, and can clearly break out in either direction.  It's very hard to not lock in at these levels, but I am still curious to see how the trade unfolds--still hoping for new lows in the near future." -Constantine Floropoulos, VP, Quontic Bank

"Rates were flat today, despite stocks' robust gains.  In this case, NOT losing ground is a bullish sign for bonds, particularly given the corporate bond supply this week.  I'm still not expecting major pricing improvements soon, but just holding our ground sure helps us all.  I'm floating most loans over 30 days from closing, locking most within 30 days.  Happy with your pricing and not a big risk taker?  Lock it up and don't look back." -Ted Rood, Senior Originator

"Mortgage rates remained the same today, as traders attempt to wait and see if the herd is going to move in one direction or the other with any level of conviction.  It truly could go either way, so at best you've got a 50/50 shot floating or locking.  That said, my suggestion is to lock because I believe that even if rates move lower over the next month....they could move higher over the next week or two before they do so." -Brent Borcherding,

Today's Best-Execution Rates

  • 30YR FIXED - 3.625 
  • FHA/VA - 3.25-3.5%
  • 15 YEAR FIXED - 3.00
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • The Fed finally hiked on December 16th, causing fears of rising rates in 2016.
  • But  global financial markets came into the new year in distress.  Now markets aren't even convinced that we'll see another Fed rate hike in 2016.  Major stock indices plummeted around the world, and investors sought shelter in the bond market.  When investor demand for bonds increases, rates fall.

  • So we're left with much lower mortgage rates despite the Fed having just begun its hiking cycle.  This paradoxical trend can continue as long as global market turmoil fuels a demand for safer haven investments.  A big bounce in oil/stock prices could mean trouble for rates--at least temporarily.

  • 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).