Mortgage rates moved just slightly lower on average, though some lenders were unchanged or higher.  The most prevalently quoted conforming 30yr fixed rate for best-case scenarios (best-execution) remains at 4.125% for a second day, with most borrowers seeing today's improvement in the form of lower closing costs.  Expressed in terms of 'effective rate,' the drop in closing costs amounts to 0.01%.  Today's rate/cost combination is the best it's been in June, but not quite back to some of the offerings in late May.

Today's improvement in bond markets (and consequently, mortgage rates) offers another degree of support for the notion that that rates have broken out of the sideways range that dominated the month of June.  For those inclined to lock, it wasn't a bad call yesterday and it still isn't today, if for no other reason than rates are at their best levels of the month and fairly close to the best levels of the past 12 months.  Of course there's a chance they could continue lower.  If you're inclined to hold out for further improvements, just be ready to lock if markets move against you.  Floating will be riskiest after Monday of next week.

Loan Originator Perspective

"Rates have finally broken resistance and are now in a new lower range. Lender rate sheets are modestly improved over yesterday. With rates comfortably inside a new range, I think it is worthwhile to float overnight and allow time for a test of the bottom of the range which is currently around 2.47ish on the benchmark 10 year treasury note." -Victor Burek, Open Mortgage

"For the risk taking rate floaters of the world I say, Bravo. You're risk taking has been rewarded of late. While continuing to float for awhile may certainly continue to pay off I think if you're closing soon and you've reaped the rewards of waiting, now may be a good time to pull the trigger and lock in these gains. Certainly waiting may pay payoff some more but with high risk events coming next week vigilance is in order. Stay connected with your loan officer and be ready to move." -Hugh W. Page, Sen. Mortgage Consultant, Capital Partners Mortgage

"The last round of auctions for the week ended with another so so auction. Bonds were able to rally even with just ok auction results. This is not normal and could be indicating a move higher in bonds prices are on the horizon.  Exercising caution is still prudent but if you have weeks to close there is an opportunity you may be able to lock at rates lower than today's levels." -Manny Gomes, Branch Manager, Norcom Mortgage

"I believe that floating has paid off and now we are in a new range. If you've floated to this point and need to lock either today or tomorrow, I would consider locking. I believe the trend will continue lower over the next week or so, but I think we may see a slight uptick before that move lower continues. If you have some flexibility to float for 3-7 days, I think that's the best option." -Brent Borcherding, www.brentborcherding.com

"The rally continues... 4.25% with a credit and 4.0% within sight. 15 year and ARM pricing attractive as well. Anyone closing in the next 30 to 45 days should look into floating until something stops this wave."  -Chris Marconi Vice President First Midwest Bank

"If you've been holding off on locking a rate since last week, you've seen a good amount of improvement--enough to consider locking it in before next week's important jobs report on Thursday (a day early due to the 4th of July holiday)." -Justin Dudek, Senior Loan Officer, Supreme Lending

Today's Best-Execution Rates

• 30YR FIXED - 4.125-4.25%
  
• FHA/VA - 3.75%
  
• 15 YEAR FIXED -  3.375%
  
• 5 YEAR ARMS -  3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations

• The Fed has stayed the course on their $10bln per meeting reduction in bond buying, though markets have handled it relatively calmly compared to the days of "coming to terms with tapering" in 2013. 
  
• Rates fell significantly in January, leveled-off in February and took choppy steps higher in March.  From there, they settled into a flat range mostly consisting of 4.375 and 4.5%, but with occasional forays to 4.25 and 4.625%. 
  
• The bias had been very slightly toward higher rates, it reversed course in early April as expectations grew concerning European Central Bank easing.  On several occasions, those expectations would go on to overwhelm domestic economic data--normally the main source of guidance for market movements.
• As of the third week in May, rates were as low as they've been since June 2013, more than confirming a break below the 2014 range.  They remained in that range through month-end and grew more volatile ahead of the June 5th European Central Bank Announcement.
  
• Looking back at recent movement, it's had a disconcertingly small amount to do with 'normal stuff' like economic data and Fed policy.  Temporary and unpredictable factors currently account for too much of the movement to make firm bets on rates moving either direction in the short term.
• The narrow range persists even now, though due to the rate landscape from a year ago, rates were officially lower "year-over-year" on June 20th.
• (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).