As we have discussed on this blog many times, the only financial instrument that directly impacts mortgage rates is the Mortgage Backed Security, which we commonly refer to as MBS. MBS are traded just like bonds, so when demand goes up, price goes up. When price goes up, yield falls. The yield moves in direct proportion (more or less) to the interest rates that lenders offer.
All that to say that today, like yesterday, is a low volume day when it comes to MBS trading. Limited selling is being met with decent demand which has served to keep rates more or less unchanged this morning.
Normally, we have numerous scheduled economic released from various institutes, agencies, the government, university studies, etc... But this week is very light in terms of those scheduled releases. This means that any factors that do come along to impact mortgage rates will have an exaggerated impact. Right now, the lack of movement in rates simply means we have NO impact.
In the historical context of the last few months rates are just a bit shy of their best levels. The lowest rates on 30 year fixed mortgages are around 5.625% assuming you pay full closing costs and have perfect qualifications. In the historical context going years back, we are also near our best levels.
So you really can't go wrong with locking a loan today. Even if rates improve, the improvement can come very incrementally, and can convulse in the process. If rates get worse, they can get worse quickly in this "data vacuum" this week.
Stay tuned this week for any market movers.