Mortgage rates made yet another small move lower, and this time it was enough to lay claim to the title of "lowest in over a month."  This is more a factor of rates being very close to 1-month lows for the entire week.  The improvements came courtesy of weak economic data at home and abroad, as well as the end of this week's Treasury auctions. 

While mortgage rates are NOT based on US Treasuries, the two tend to move together for the most part.  During week's where Treasury is conducting auctions, market dynamics can push rates just slightly higher than they otherwise would be.  Once the burden of being forced to buy billions of dollars of new debt has passed (primary dealers are forced to bid on Treasuries), bond markets can breathe a slight sigh of relief, and MBS (the mortgage-backed-securities that dictate mortgage rates) can glean some of the benefit.

Today's improvements further solidify 4.125% as the most prevalently quoted conforming 30yr fixed rate for flawless scenarios.  4.25% remains a competitive rate for many other scenarios.  Borrowers who were quoted the same rates today and yesterday would see the improvements in the form of lower closing costs.

Loan Originator Perspective

"Some additional slight improvement today helping pricing in the mortgage market but my gut still tells me it's still prudent to protect these gains for those with short term closings (15 days or less). At some point we will likely get some impetus that pushes us out of the range we've been in for several months but we don't know what or when that will be. Cautiously floating longer term closing scenarios seems okay for now but stay connected to your loan officer who hopefully is in tune with the markets (or is simply an MBS Live Subscriber)." -Hugh W. Page, Mortgage Banking Officer, Seacoast National Bank

"There really has been little change to the market day to day this week, and because of that my belief remains the same. Locking is still the most prudent option. Until there is an obvious move lower, through the bottom of this long term range, rates still remain at the greatest risk of moving higher." -Brent Borcherding, brentborcherding.com

"Thanks to weak data out of Europe, lender pricing did improve this morning but seems like there is still a lot of cushion. Now that the auction cycle is over, I think floating overnight is the way to go. But as always, with the improved pricing this morning there is nothing wrong with locking in those gains." -Victor Burek, Open Mortgage

"Mortgage bonds improved again today but are near levels were selling typically takes place. The strong treasury auction this evening bodes well for trading into tomorrow. If your rate sheets did not improve today holding off to tomorrow for potentially improved pricing may benefit you. We are certainly in a day by day float stance." -Manny Gomes, Branch Manager, Norcom Mortgage

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 hallmark of 2014 so far has been a disconcertingly narrow range in rates.  Too many market participants bet on rates going higher in 2014, and markets have punished that imbalance with a paradoxical move lower.
  
  
• As of June, rates were officially lower year-over-year, but that's due to rates' path higher in 2013.  The current path in 2014 remains sideways. 
  
  
• European markets continue to play a nagging role in the background, generally helping rates in the US remain lower than they otherwise might be. 
  
  
• From a wider point of view, we're in limbo, waiting for the first significant move away from the narrow range.  A rally into late May stood a chance to act as this break, but rates have since returned to what were previously the lower limits of the 2014 range.
  
  
• 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, 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).