Mortgage Rates continued a trend of slight, incremental improvements today, meaning that--on average--it's another record setting day.  As has been the case, there are a few caveats...  First, the improvements have only come in small amounts and only with respect to borrowing costs.  The actual interest rates that constitute the best combination of monthly payment and fees for the best-qualified borrowers planning on keeping their home/mortgage an average amount of time have not changed. 

Second, lenders continue pricing in the effects of the tax cut extension.  That means that an individual lender may pop up an eighth in rate or experience an increase in borrowing costs as opposed to the average lender being slightly improved today.  So far it seems that some lenders are pricing the tax cut effects in over time while others are making actual announcements and getting the adjustment done all at once.

Today was fairly quiet in terms of market movements.  There was no major economic data this morning and volume remained fairly low.  That should begin to change tomorrow as 2012 continues to get off the ground with the help of more economic data and the first of the three main Treasury auctions of the week.  Tomorrow's 3 Year Treasury auction is of the least consequence to the Mortgage-Backed-Securities (MBS) that most directly influence lenders' rate sheets but could still have some impact.


  • 30YR FIXED -  3.875%, glimpses of 3.75% at the top few lenders.
  • 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.