Mortgages Rates are steady to slightly improved today after rising for the first time in a month yesterday.  Although rates change slightly every day, those changes are usually small enough as to only effect the closing costs associated with a particular rate.  Because of this, we track "Best-Execution" as the actual interest rate benchmark, and we talked about it in significant detail yesterday (READ MORE).  So although we are able to report that the rate environment is slightly improved today, those improvements have been mostly relegated to minor decreases in borrowing costs for what will likely be the same rate you would have been quoted yesterday. 

Underlying markets have been fairly equivocal for the past two days with a majority of the damage to mortgage rates having occurred with last week's market movements that lenders more fully priced into rate sheets yesterday.  Stocks, Bonds, and MBS (the "mortgage-backed-securities" that most directly influence mortgage rates) are all very close to where they were last night, seemingly in preparation and anticipation of several important events tomorrow. These include the FOMC Statement (Fed "rate decision," although it's the text of the announcement that is important as no change is expected to the discount rate), the first-ever release of FOMC members forecasts, a post-announcement press conference from Ben Bernanke, as well as the 5yr Treasury Note auction. 

Tomorrow's events, taken in conjunction with tonight's State of The Union address presents quite a bit for mortgage markets to digest.  The speech tonight may contain mention of new housing-related initiatives (some have suggested), and similar suggestions have been made about tomorrow's FOMC Announcement (which would be a MUCH bigger deal as far as influencing mortgage markets).  Conversely, it's possible that some recent levity for MBS vs Treasuries is due to the EXPECTATION that the Fed will add some extra MBS-Specific quantitative easing in the near future, meaning that rates could face some added pressure if MBS are NOT specifically mentioned, although that's not likely to cause sufficient movement tomorrow for Best-Execution to rise.  Whatever happens tomorrow, it's a high-risk set of events that could push rates higher OR lower, but we'll hopefully come away from it with a clearer sense of whether or not rates will make it back down to a 3.875% Best-Execution any time soon.

Today's BEST-EXECUTION Rates

• 30YR FIXED -  4.0%, 3.875% still a contender
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375%
  
• 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
• Current levels have experienced increasing resistance in improving much from here
• There are technical reasons for that as well as fundamental reasons
  
• Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
• While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
• But that will always be the case when rates operating near historic lows