Mortgage rates held steady in most cases today, though several lenders continued to improve.  The average lender is at least down to 3.75% in terms of conventional 30yr fixed rates on top tier scenarios, but many are already back to 3.625%.

Yesterday's strong gains came courtesy of a speech from Fed Chair Yellen, and today provided an opportunity for financial markets to confirm their intentions.  If the Yellen-inspired drop in rates was going to be a temporary knee-jerk movement, we would have seen evidence of that today.  As it stands, this sideways movement is the market's way of getting comfortable with heading back toward lower rates.  It's not necessarily a given, but the point is that it hasn't been ruled out.

Whether or not we can remain in this range (or better) may be determined with Friday's big jobs report.  It's not so much the level of job creation as it is the potential for a big surprise in wage growth that could affect rates.  More wage growth would cause an increase in inflation expectations, which is the Fed's toughest opponent when it comes to raising rates.  

Loan Originator Perspective

"At the start of the day, bonds gave back some of the gains they enjoyed yesterday.  With the losses occurring when rate sheets are being issued, lenders were conservative and held back some of the gains.  The 10 year treasury bounced off a nice level of support.  With that support level holding and with bonds back to unchanged on the day, I think it would be worthwhile to float tonight.  As always, if you are happy with the current quote, nothing wrong with locking. " -Victor Burek, Churchill Mortgage

Today's Best-Execution Rates

• 30YR FIXED - 3.625-3.75%
  
• FHA/VA - 3.25-3.5%
  
• 15 YEAR FIXED - 3.00
  
• 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

• The Fed finally hiked on December 16th, causing fears of rising rates in 2016, but markets began the new year with rates moving surprisingly lower.  Major losses in stocks and oil prices were part of the same trend of investors moving away from risk.

• After bottoming out fairly close to all-time lows in February, rates began to rise somewhat sharply in March as market panic subsided and as the Fed signaled it would probably still hike rates in 2016--just not as quickly as anticipated.
  
  
• It remains to be seen whether markets can continue to move in this risk-friendly direction (read: bad for rates, good for stocks).  Stocks have yet to break out of a gradual downtrend that began in mid-2015.  If they do, it could keep pressure on rates to continue higher.
   
• We HAD been leaning toward locking since March 1st, which has proved to be a very solid strategy, but began to reconsider starting the 3rd week of the month.  We've been more open to the idea of floating since then, as long as you're setting a stop-loss level somewhere overhead, meaning you'd lock to avoid further losses if markets move against you.
   
• 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).