Because treasuries continue to diverge from MBS.  Earlier this morning, treasuries were negative while MBS were positive.  Now treasuries are unchanged and MBS are even better.  Not a good day to base assumptions on treasuries.
 
The Numbers:

6.0% FNMA is up 6 / 32nds at 101-08

5.5% FNMA is up 7/32nds at 98-28

Both of these are much better than Yesterday's Levels

 
The News:

    There is no scheduled data for today with the exception of Mortgage Applications.  This was higher than June's reading, but almost completely unimportant to mortgage rates 

Lock/Float Conclusion:
  • Float
  • Vigilance: Medium

Slow news days are a tough call because anything can happen.  We are looking very good right now and have had reasonable strength throughout the morning.  If the climate remains stable, this should continue throughout the day.  But on days like today, unexpected headlines, or "tape-bombs" as some say, could shift market sentiment in a matter of minutes. 

Whether you float or lock today largely depends on how aggressive your lender is.  If they are pricing on the bleeding edge of this potential uptrend, locking is worth consideration.  fundamental and technical indicators are leaning towards rates getting even better, but as I like to point out, the regret one feels for floating at the wrong time is significantly more painful than that of locking at the wrong time.  Even though rates will *probably* improve, today's rates are still going to be the best we've seen in just over a month.  Not only that, but we are much closer to historic lows than highs.

So although if you lock, rates may drop further, it's not a bad call.  But if you have the risk tolerance to put either the cash to "let it ride," you may be well rewarded.  This assumes that the economic data, at the very least, is not damaging to mortgages.  So the moral of the story is that it's slightly more likely rates will improve than worsen, but they're still quite good.  Considering the variables, there's no shame in locking, but if you can tolerate the risk of being "ticked" both emotionally and financially, the odds, ever-so-slightly though they may be, favor floating.

Price trends will be heavily "data dependent" tomorrow and Friday.  We have Jobless claims tomorrow, and International Trade/Inflation/Consumer sentiment on Friday.  All of these reports have added some pessimism thanks to last week's numbers.  If we hit them or get even worse, it's good for MBS.