Mortgage rates were lower at first today, but most lenders sent out negative reprices in the afternoon, bringing rates back to unchanged levels.  The bond markets that underlie mortgage rate movement continued taking cues from global volatility surrounding yesterday's big news out of China. 

Whereas yesterday was more of a free-fall for all manner of interest rates, today saw them find a bottom and reverse course.  Whether the bottom is temporary remains to be seen.  Either way, it leaves us in a slightly less optimistic position. 

We're still in the early stages of determining what the lasting effects will be from the China news.  There's no great way to account for the potential effects in lock/float strategy.  On the one hand, rates were as low as they've been in more than 2 months today.  Locking can't be argued against with that in mind.  But risk-takers might want to wait until a bigger move lower can be ruled out, as long as they understand the potential costs if rates move higher.

Lenders continue quoting conventional 30yr fixed rates in a range of 3.875-4.0% for top tier scenarios, with a few lenders on either side of that range by an eighth of a point.

Loan Originator Perspective

"Bonds were nearly unchanged today after some late day weakness. While some lenders worsened rates, my PM rate sheets still reflect pricing better than Tuesday's. A pause after dramatic rate movements (either up or down) is hardly surprising, and doesn't prove the trend to lower rates is ending. I'll continue to consider floating loans for risk-tolerant clients, but will do so warily. The trend is still our friend (or at least not our enemy) at the moment." -Ted Rood, Senior Loan Originator

Today's Best-Execution Rates

• 30YR FIXED - 3.875-4.0%
  
• FHA/VA - 3.75%
  
• 15 YEAR FIXED - 3.25%
  
• 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

• 2015 began with a strong move to the lowest rates seen since May 2013.  The catalyst was Europe and the introduction of European quantitative easing.  Investors bet heavily the move lower in European rates and domestic rates benefited as well.  But with those bets finally drying up in April and with the Fed seemingly intent on hiking rates in the US, May and June saw a sharp move back toward higher rates.  The implicit fear is that global interest rates set a long term low in April, and have now begun a major move higher.
  
  
• July said "not so fast" to that potential "big bounce."  Some of the data began to suggest the Fed is still a bit too early in talking about raising rates in 2015--particularly, a lack of wage growth or any promising signs of inflation.  But Fed proponents maintain that low inflation is a byproduct of temporary trends in the value of the dollar and the price of oil, and that once these factors  level-off, inflation will ultimately return.  That side of the argument suggests that inflation could increase too quickly if the Fed hasn't already begun normalizing interest rates.
  

• With all of the above in mind, locking made far more sense for the entirety of May and June, and we were not shy about saying so.  The second half of July saw that conversation shift toward one where multiple outcomes could once again be entertained.  In other words, we went from "duck and cover!" to "let's see where this is going..."  
  
  
• Bottom line, locking is always the safest bet and it was the only bet from late April through early July.  Since then, there's been room for other points of view.  We should know a lot more about how valid those points of view are as August and September progress.
  
  
• 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, conventional 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).