Mortgage rates moved moderately lower today in most cases.  Although the drop wasn't fast-paced or abrupt, the recent range of rates has been extremely narrow.  As such, a merely "medium-sized" move has carried rates just barely beyond their best levels of the past two weeks which are also the best levels since the first few days of the month.  The gains aren't sufficient for a change in the Conventional 30yr Fixed Best-Execution rate, which continues at 3.5%.  That said, different lenders continue to fall an eighth on either side of that depending on the scenario.

(Read More:What is A Best-Execution Mortgage Rate?)

Today was essentially the last day before the pace and importance of market events increases into the end of the week.  Barring any major surprises in economic reports over the next two days, markets are intently focused on Friday's speech from Fed President Bernanke at Jackson Hole, which itself, is merely the appetizer for two action-packed weeks of data and events.

We continue to view the upcoming days and weeks as having a wide range of potential outcomes depending on the tone of events.  All things being equal, momentum has been more sideways since 8/23, with rates fluctuating mildly around 8/23 levels.  It's as if the crowd is growing silent waiting for a show to start.

Long Term Guidance: We'd continue to advocate against trying to "get ahead" of current market movements due to the high degree of uncertainty.  The long-term direction of rates has been down, down, down, for the past year.  At some point, this will turn, and when it does, we highly recommend that you're prepared by drawing your OWN line in the sand as to how much rates would have to rise before you lock at a lost.  That's assuming you don't simply lock as soon as you're able.  For those with lower levels of risk tolerance who would consider movements in cost (despite unchanged interest rates) to be significant, or for those within 15 days of closing, or who are purchasing, this certainly favors locking.  We'd also consider that rates remain very close to all-time lows and uncertainty to all-time highs.  This also favors locking.

Loan Originator Perspectives

Julian Hebron, Branch Manager, Loan Agent, RPM Mortgage

Rates drop when MBS prices rise, and in the past two days, the benchmark 3.5 Fannie Mae MBS coupon has risen above the 25 and 50 day moving averages. This is the rate dip I've been advising clients to take once it returned following a rate rise that ran from July 24 through August 17. My lock advisory since yesterday continues for all refi and purchase clients.

Ted Rood, Loan Officer, Bank Star

Seems markets are as uncertain these days as my clients are. Between firscal cliff, elections, and European uncertainty, there's a lot of variables to account for. Bottom line, while rates may not be at absolute lows, they're still amazing. Can't go wrong locking, in my opinion.


  • 30YR FIXED -  3.5%
  • FHA/VA - 3.5% (varies more between lenders than conventional 30yr Fixed)
  • 15 YEAR FIXED -  2.875-3.00%
  • 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
  • Rates could easily move higher or lower, but given the nearness to all time lows, there's generally 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.
  • (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario.  There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).