Mortgage Rates were sharply sideways today, with almost every lender offering the exact same terms as yesterday.  This is part of an ongoing phenomenon that's seen rates rise just slightly from near-all-time lows in early July only to hold an intensely narrow range for more than a month now.  

To be clear, there are no historical examples of rates moving any less over the course of a month, although there have been a handful of roughly similar time frames.  Bottom line, rates are as narrow and inactive as they can be.  

When it comes to following rates and broader financial markets, the conventional wisdom is that longer-lasting and more narrow the trading range, the bigger the breakout will be.  The only catch is that the breakout can happen in either direction.  

As far as catalysts for such a break, we can continue to look toward this Friday's Jackson Hole speech from Fed Chair Yellen.  There's certainly no guarantee that Yellen will get rates moving again, but she has a better shot than anything else this week.  

Then there's the question of whether we even want rates to move out of a range that's only about a quarter point above all-time lows.

Loan Originator Perspectives

Bond markets currently holding steady in the current confined range creates a good opportunity to lock and move on. Although I firmly believe we are yet to see the lowest of the lows in mortgage rates, the timing is what matters, and right now locking in makes the most sense. Loans with over 30 days to close can speculate on the potential for lower rates. -Constantine Floropoulos, VP, The Federal Savings Bank

Today's Best-Execution Rates

  • 30YR FIXED - 3.375 - 3.5%
  • FHA/VA - 3.0 - 3.25%
  • 15 YEAR FIXED - 2.75%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • In the biggest of pictures, "global growth concerns" remain the driving force behind the long-term trend toward lower rates
  • Amid that trend, periodic corrections toward higher rates can and will happen.  These can happen for no apparent reason, or they can be brought on by changes in expectations surrounding central bank policy at home and abroad, as well as geopolitical and systemic risks

  • Time horizon and risk tolerance are 2 variables to consider when it comes to locking.  If you have plenty of time and don't mind losing some ground, set a limit as to how much higher rates could go before you'd lock to avoid further losses, and then float in the hopes of never seeing that limit.
  • In the shorter-term, it's always good to look for lock opportunities after rates have been moving lower or sideways repeatedly, especially if they've since begun to move back up in any sort of consistent way. 
  • As always, please keep in mind that the rates discussed generally refer to what we've termed 'best-execution' (that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also 'bang-for-the-buck.'  Generally speaking, our best-execution rate tends to connote no origination or discount points--though this can vary--and tends to predict Freddie Mac's weekly survey with high accuracy.  It's safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie's once-a-week polling method).