Mortgage Rates  remain in the same range they've been in for weeks, although nearer to low side of that range today.  The market phenomena driving rates microscopically lower are paradoxically the absence of market phenomena.  The securities most directly responsible for mortgage rates, MBS, like it when things are calm and predictable in fixed-income markets.  When a benchmark of those fixed-income markets such as 10yr Treasuries manage to trade no higher than yesterday's highs and no lower than yesterday's lows (what market participants might call an "inside day"), there's a good chance MBS will outperform, as they have today.

So this is yet another day where Treasury rates are generally higher (maturities over 2 years) and mortgage rates are steady-to-lower.  Keep in mind "lower" rates might not mean that the rate you're being quoted between today and yesterday is any lower--simply that the closing costs required to obtain that rate may have decreased.  On average, the best-execution 4.0% rate remains intact, although a few more 3.875% quotes have become viable at certain lenders.

No major change to the guidance below.  Without much by way of domestic economic data, and with the important EU Summit on Friday, we remain on alert for any significant European headlines as the primary market-mover this week.


  • 30YR FIXED -  4.0%, increasing amount of 3.875's.
  • FHA/VA - 3.75%, fewer 3.875's
  • 15 YEAR FIXED -  3.375%-3.5%
  • 5 YEAR ARMS -  low 3% range, huge variations from lender to lender.


In a fundamental sense, we're well aware of the fact that European drama continues to help domestic bond markets.  Technically, we're impressed that mortgage rates have been this flat for this long.  With the ongoing sideways movement of Best-Execution around 4%, the chances increase that the next move will carry a bit of momentum with it (as if the current calm is akin to "storing energy").  If it goes in a mortgage rate-friendly direction, there's limited benefit (an eighth to a quarter of a point of improvement) versus the damage that could result from it going the other way.  Fortunately, neither of those eventualities appear to be happening at the moment, so it's hard to go wrong.  We'll let you know the day that changes.