Mortgage Rates were unchanged in many cases today, with a handful of lenders inconsequentially better or worse versus yesterday's latest offerings.  Despite moving lower on 4 out of the past 6 days, rates were never able to put meaningful distance between themselves and the highest levels in more than 4 months.  

The slow progress was partly a market phenomenon and partly due to lender strategy.  Mortgage rates are driven by bond markets--specifically, mortgage-backed-securities (MBS).  Bond markets were hesitant to rush back toward lower rates after topping out in mid-October because traders continued to wait for key events for the green light.  Now that one of those events (the European Central Bank's official comment on its longer term bond buying plans) is on hold until early December, traders are only more hesitant to make big moves.  

Lender strategy is a reflection of the same phenomenon: uncertainty about future market movement keeps lenders from sticking their necks out too far.  In other words, lenders hesitate to offer lower rates than peers when there's a risk that rates could bounce higher due to potential market volatility.  

Loan Originator Perspective

Rates continue to be range bound, and I do not see anything that is going to change that in the immediate future. I would encourage clients to lock in if they are within 30 days of closing and would strongly encourage those within 15 days. 15 day rate locks do offer slightly better terms, so if you float over night and lock tomorrow on 15 days, I would take that risk. -Victor Burek, Churchill Mortgage

Today's Best-Execution Rates

  • 30YR FIXED - 3.625%
  • FHA/VA - 3.25-3.5%
  • 15 YEAR FIXED - 2.875%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • Rates have generally been trending higher since hitting all-time lows in early July
  • Clearly-defined uptrends provide higher-than-average motivation to lock

  • Risk-takers can try to time the dips in rates that may occur during that broader uptrend, but the reward for good timing generally isn't worth the risk in these situations.
  • We'd need to see a sustained push back toward lower rates (something that lasts more than 1-3 days) before anything less than a cautious, lock-biased approach makes sense for all but the most risk-tolerant borrowers. 
  • 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).