After several days at record lows with little deviation in borrowing costs, Mortgage Rates worsened somewhat today.  The weakness, however, does not affect the 3.875% Best-Execution rate; the borrowing costs involved in obtaining that rate are merely higher. 

Although there was stronger economic data on the home-front this morning, the real market mover continues to be Europe.  Lately, another major consideration is that the will of the markets is immediately felt due to low year-end volume.  

Please make sure to read the "important rate disclaimer" at the bottom of the page in considering what "all-time lows" means.  The issue of "buckets" as described in the lock/float considerations below, remains a factor that may prevent rates and/or fees from moving significantly lower in the short term.

Today's BEST-EXECUTION Rates

• 30YR FIXED -  3.875%
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375%
  
• 5 YEAR ARMS -  2.625-3.25% depending on the lender
  

Lock/Float Considerations

Yesterday, we voiced some concern about the record levels and low volume:

The expectation for this week's low volume, combined with record levels in loan pricing is a potential risk factor.  The lower a market's volume, the more weight carried by those who participate meaning that it takes fewer trades/less money to move things around.  With respect to benchmark Treasuries, it seems traders are more willing to ride the wave of lower rates as opposed to swim against it.  Buyers outnumber sellers, but in an environment where volume is this low, that can change fairly rapidly, and if it does, Mortgage-Backed-Securities could take some damage. 

Beyond that, the incentive to float with rates at all-time lows is fairly limited, especially considering that further improvements are likely to be hard-fought and slow in coming due to the MBS Buckets considerations discussed in last week's posts:

Although we're no longer looking at record levels today, the themes remain: low volume, higher volatility, and European considerations trumping domestic data.  There are plenty of risk factors ahead in the coming days including details on today's lending operation in Europe.  That hits tomorrow morning before most lenders release rate sheets, so if it has a negative effect on interest rates, there wouldn't be any time to react tomorrow.