Mortgage rates were nominally higher today, though you'd be hard-pressed to find any evidence of that on lender rate sheets.  For all practical purposes, rates haven't moved since last Thursday afternoon.  During that time, any detectable changes have come in the form of small adjustments in closing costs, with no change to the interest rate quoted.  Most lenders are offering conventional 30yr fixed rates in a range of 3.375-3.5% on top tier scenarios at the moment.  A scattered few are up at 3.625%.

In the bigger, more stategic picture, it was fair to hope that rates were breaking out of a sideways range last Friday and might begin to build momentum this week.  Instead, they've backtracked, putting us right back in the same position.  Specifically, the range is sideways, and we're waiting for a breakout once again.  The caveat here is that we can now read SOME hesitation into the fact that rates failed to break toward lower levels.  This doesn't necessarily mean we're doomed, but it does suggest a defensive strategy ahead of this week's remaining economic events.  In other words, locking is a slilghtly better bet until rates decide which way they'll move out of this narrow range.


Loan Originator Perspective

Bonds sulked at nearly unchanged levels today, and markets showed little conviction to either (buy/sell) side.  With NFP for July on Friday and a BOE policy announcement tomorrow, we'll know more soon.  I see more short term potential for bond market losses than gains, am discussing locking loans within 30 days of closing with clients.  Would take a lackluster report to make an impact on this market, or at least that's what it feels like to me -Ted Rood, Senior Originator

With the employment report due out early Friday morning, I feel there is more to risk than to gain by floating if closing within 30 days.  So I think locking here is the wise move. -Victor Burek, Churchill Mortgage

Barring the unforeseen, it appears mortgage rates are comfortable in this current range.  My locking position has been consistent for the past few weeks, loans closing inside of the next 10 days are locked, longer time frames can weigh the risk and decide if it is worth it.  I believe we are in the midst of an uptick in rates that will lead us to a bigger down tick in the move up, two moves down.  I am a firm believer that we have yet to see the bottom. -Constantine Floropoulos, VP, The Federal Savings Bank

Today's Best-Execution Rates

  • 30YR FIXED - 3.375-3.5%
  • FHA/VA - 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).