After rising by a very small amount on Friday, Mortgage Rates begin the current week in roughly the same territory.  The changes taking place over the past few days have been small enough that, in most cases, the actual interest rates going out on estimates or being locked are unchanged and only the costs involved in obtaining those interest rates have changed.

In fact, on any given day, the same interest rates as the previous day are almost always available but the costs for a particular rate may have risen so much that the next 0.125% higher in rate could be a more efficient combination of closing costs and monthly payment.  We talked more in this post about that efficient combination, aka "best-execution."

Although best-execution rates remain at 3.875% on average, the back-to-back days of marginal weakening have us inching our way somewhat closer to 4.0%.  Some lenders are best-priced at 4.0% even today.  In general, offerings between lenders are slightly more diverse than normal.


  • 30YR FIXED -  Down to 3.875%, but some 4.0's
  • FHA/VA - Back firmly to 3.75%
  • 15 YEAR FIXED -  3.375%
  • 5 YEAR ARMS -  2.625-3.25% depending on the lender

Lock/Float Considerations

In terms of the market forces that underly movements in mortgage rates, today was sort of a "gimme."  Not much happened.  Volume and volatility were low, and rates remained roughly unchanged.  But the level of activity picks up significantly in the next 3 days and as far as many market participants are concerned, this is effectively the last full trading week of the year. 

There's a 10yr Treasury Note Auction tomorrow as well as the Fed Rate Decision in the afternoon.  Both are potential market movers, as well as the ongoing potential for headlines out of Europe.  As always, these events can move markets in either direction but historically, when rates have gotten as low as they are currently (in terms of Best-Execution), there's only been a few hours ever, when they've been able to move any lower.  In other words, 3.875% is as low as Best-Execution has stably been.  This is what we're talking about as we've consistently said that there's limited improvements to be had under 4.0%.  If that ceases to be the case, it would constitute a pretty big shift in the Secondary Mortgage Market and we're not there yet.