Mortgage Rates did one of two things today, depending on the lender in question.  Some lenders simply held in line with yesterday's latest levels (in other words, they were 'unchanged' on the day).  Other lenders had some ground to make up because they maintained more conservative pricing.  

This second group kept rates a bit higher yesterday even as most of their peers were offering mid-day price improvements due to big gains in bond markets.  In these cases, the lenders used this morning's calm bond market environment to bring their rates back in line with the rest of the pack.  After all was said and done, today's rates look very much like last Thursday's.

In the bigger picture, today's rates are well within the range that has dominated the past 45 days.  During that time, the average conventional 30yr fixed quote has been 3.375%-3.5% depending on the lender.  Where we go from here may well be dictated by the economic reports coming out during the remainder of the week.  In that regard, Friday has the biggest potential for drama, thanks to the important Employment Situation Report.  But many view tomorrow morning's ADP data as an early indicator of Friday's jobs report.  As such, potential volatility will be increasing from here.

Loan Originator Perspectives

Today appears to be a tactically correct day to lock.  Strategically, we won't know until at least Friday after the jobs report, but with improvements yesterday/today, my short termers - all under 30 days to close are locked.   -Matt Hodges, Charlottesville Sales Manager, Presidential Mortgage Group

Pretty quiet day in bond markets on Tuesday, the big question is whether that continues.  Wednesday marks ADP's August jobs growth estimate, followed by Friday's NFP report.  If those two deviate from expectations, they could provide the spark to move rates from their current tight range.  I still favor locking loans within 30 days of closing, pricing is great now, don't see that much potential for significant short term gains.  If you float into Thursday, discuss NFP's potential impact with your loan officer THEN, Friday will be too late! -Ted Rood, Senior Originator

Today's Best-Execution Rates

  • 30YR FIXED - 3.375 - 3.5%
  • FHA/VA - 3.0 - 3.25%
  • 15 YEAR FIXED - 2.75%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • In the biggest of pictures, "global growth concerns" remain the driving force behind the long-term trend toward lower rates
  • Amid that trend, periodic corrections toward higher rates can and will happen.  These can happen for no apparent reason, or they can be brought on by changes in expectations surrounding central bank policy at home and abroad, as well as geopolitical and systemic risks

  • Time horizon and risk tolerance are 2 variables to consider when it comes to locking.  If you have plenty of time and don't mind losing some ground, set a limit as to how much higher rates could go before you'd lock to avoid further losses, and then float in the hopes of never seeing that limit.
  • In the shorter-term, it's always good to look for lock opportunities after rates have been moving lower or sideways repeatedly, especially if they've since begun to move back up in any sort of consistent way. 
  • 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).