Mortgage rates moved lower again today, hitting their best levels since July 23rd.  That achievement is mostly a factor of what has been an extremely flat rate environment for the past two weeks followed by a moderate improvements over the past 2 days.  The day was generally drama-free with the Jobless Claims report in the morning arriving in line with expectations and an average Treasury bond auction in the afternoon.  In general, the markets that underlie mortgage rates are relatively detached from the day to day minutiae at the moment and prepared for bigger movement in the weeks to come.  Conventional 30yr Fixed best-execution remains at 4.5% and buydowns to 4.25% may make sense for some scenarios.

Tomorrow is more of a wildcard than the first four days of the week in terms of volatility.  While it continues to be the case that we're not expecting much movement higher or lower, tomorrow's session is light on data and events.  It won't draw in as much necessary participation from traders and such days can be a bit more volatile than others (because with fewer traders on either side of the fence, it takes less conviction to push rates in one direction or the other.  Bigger-ticket events arrive on Tuesday and between now and then, any big potential movements in rates are more likely to come from unexpected, unscheduled news.

Loan Originator Perspectives

"As hoped, MBS prices still running a bit in the right direction this PM. No significant data tomorrow to pose an immediate concern. Still advising buyers and rate sensitive clients that there's limited potential for further improvement; question is whether to hope for more when we're at our best levels since July 22." -Ted Rood, Senior Originator, Wintrust Mortgage

"Mortgage rates have improved a little over the last few days, but there is still lack of any motivation to drive rates lower. The bond market continues to stay in wait and see mode waiting on the inevitable tapering. For mortgage rates to substantially improve, the market needs to be convinced that tapering is not coming this year. For the moment, there is not much to gain by floating."  -Victor Burek, Open Mortgage

"Although the consensus would be to lock on any improvement from the previous day, we feel firmly that the 10 year US Treasury has hit certain resistance thresholds around 2.74-2.75. Additionally, the charts indicate a double top at that level, further concluding that the market is range bound as far as finding resistance. High 2.5's low 2.6's have provided that resistance for now, but we believe the market will make a move towards the high 2.4's before the next attempt to test and break 2.75%. Technicals tell us to float, as we have been for the previous few weeks. Fundamentals are a mixed bag. Tough call to make, but we are testing the market with loans closing with 3 weeks or more time." -Constantine Floropoulos, Quontic Bank

Today's Best-Execution Rates

• 30YR FIXED - 4.5%
  
• FHA/VA - 4.25%
  
• 15 YEAR FIXED -  3.625%-3.75%
  
• 5 YEAR ARMS -  3.0-3.25% depending on the lender

Ongoing Lock/Float Considerations

• After rising consistently from all-time lows in September and October 2012, rates challenged the long term trend higher, but failed to sustain a breakout
• Uncertainty over the Fed's bond-buying plans is causing immense volatility in rates markets and generally leading rates quickly higher
  
• Fears about the Fed's bond-buying intentions were proven well-founded on May 22nd when rates rose to 1yr highs after the Fed indicated their intention to taper bond buying programs sooner vs later
• The June 19th FOMC Statement and Press Conference confirmed the suspicions.  Although tapering wasn't announced, the Fed made no move to counter the notion that they will decrease bond buying soon if the economic trajectory continues
• Rates Markets "broke down" following that, as traders realized just how much buy-in there was to the ongoing presence of QE.  These convulsions led to one of the fastest moves higher in the history of mortgage rates and market participants have not been eager to be the among the first explorers to head back into lower rate territory until they're sure they'll have some company.
• (As always, please keep in mind that our Best-Execution rate always pertains to a completely ideal scenario.  There are many reasons a quoted rate may differ from our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).