Mortgage rates continued lower today following the Janet Yellen's confirmation hearing before the Senate Banking Committee.  Yellen is the nominee to replace Bernanke as the Chair of the Federal Reserve, and her stance on monetary policy is tremendously important to bond markets (including mortgage-backed securities, which most directly influence mortgage rates).  The most prevalently quoted conforming 30yr fixed rate for ideal scenarios (best-execution) is now well into 4.375%, and at this point it's closer to 4.25% than 4.5% though there are lenders on either side.

The past two days have been a big relief for mortgage rates as they've undone a measure of damage done by Friday's jobs report.  This sort of strength is not typical following such a big dose of weakness (when the weakness is due to the official monthly jobs numbers).  For those who missed the opportunity to lock a rate before that jobs data, would you have taken the opportunity to lock today's rates on Tuesday afternoon?  If the answer is yes, then the desire to lock should be no less today.

The past two days of improvement go a long way toward arresting the slide higher in rates, but they fall short of carving out a new trend lower.  That said, if you set a personal limit where you'd lock your rate at a loss if rates begin to rise again, those inclined to float wouldn't be outside their rights to do so here.

Loan Originator Perspectives

"Floaters were rewarded once again thanks to Janet Yellen's confirmation hearing in front of the Senate Banking Committee. Rates opened better today, and some lenders(as of noon central time) have even repriced for the better. We picked up some nice gains over the last couple days, so consumers closing within the next couple weeks should strongly consider locking. Longer term closings, I would continue to float as we have some support at 2.72ish on the 10year." -Victor Burek, Open Mortgage

Today's Best-Execution Rates

• 30YR FIXED - 4.375%
  
• FHA/VA - 4.25%
  
• 15 YEAR FIXED -  3.5%
  
• 5 YEAR ARMS -  3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations

• Uncertainty over the Fed's bond-buying plans and Fiscal Policy has been making for a tough interest rate environment where we're not seeing sustained improvement unless it's a correction to even bigger deterioration.
• The Fed's bond buying is the key consideration--not just the initial reduction (aka "tapering"), but the general pace of withdrawal.  We've gone from tapering being a "sure thing" in September, to it being on hold until March 2014, and now December 2013 is increasingly possible after the most recent Employment report on Nov 8th.
• Markets continue to be most interested in economic data and its suggestions about the longer term trajectory of the economy.  This will shape expectations for Fed policy in the coming months, and thus inform the direction of interest rates.
• The stronger the data the more likely the Fed is seen as reducing asset purchases.  Rates would rise under this scenario, but the Fed indicated its cognizance of high rates creating headwinds for the recovery, and this suggests they'll attempt to keep the pace of rising rates moderate as long as inflation isn't adversely affected. 
  
• (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).