If we ever get into mortgage-rate-specific sketch comedy, surely we'd link sketches together in Monty Python style, but with a slight twist: "and now for something completely similar."  Mortgage Rates held steady to slightly improved today.  This comes after yesterday marked the first hint of rate drama we've seen in 2012, which was nothing more than a minor increase to borrowing costs.  With each passing day of Best-Execution rates staying glued to 3.875%, we grow more and more weary of the monotony, but couldn't be any happier. 

Yes!  Weariness and monotonous market movements have never been so exciting!  Each of those boring passing days with 3.875% rates is another day where mortgage rates have held steady at all time lows, and another day longer in this record-long streak of record-setting rates.  As has been the case, the only detectable movement continues to be seen in the form of the closing costs associated with prevailing rates.  Sure, there have been some fluctuations at individual lenders as the price of the tax cut extension works its way through the market, but on average, this is by far the longest stretch of time that best execution rates have spent under 4.0%, ever. 

At this point, the shock and awe of "rates in the high 3's" has been replaced by the shock of how long that phenomenon persists.  Perhaps "shock" isn't the ideal word.  Given the market backdrop, we'd expect low rates, but the extent to which they've held steady recently is impressive.  In the longer run, it's possible rates could go even lower, but their recent steadiness reiterates that which we already know and have been observing: an increased resistance/difficulty in moving lower from here.

For what it's worth, the decision to express a level of "surprise" today comes on the heels of what was the most action-packed trading day of the week.  It wasn't much more active than yesterday, but there was more domestic economic data to be sure, and choppier trading in the bond markets of which MBS ("mortgage backed securities" that most directly govern loan pricing) are a part.  The fact that you'd never know any of this was transpiring based on lender's rate sheets is a testament to Mortgage Rates intense predisposition to remain flat these days.


  • 30YR FIXED -  3.875%, glimpses of 3.75% diminishing due to tax-cut-extension
  • FHA/VA -3.75%
  • 15 YEAR FIXED -  3.375%
  • 5 YEAR ARMS -  2.625-3.25% depending on the lender

Ongoing Lock/Float Considerations

  • Rates and costs continue to operate near all time best levels
  • Current levels have experienced increasing resistance in improving much from here
  • There are technical reasons for that as well as fundamental reasons
  • Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
  • While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
  • But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.