Mortgages Rates enjoyed a second day of doing something other than frantically rising or merely holding sideways.  Rate offerings at most lenders improved just slightly though some lenders recalled initial rate sheets for moderate increases late in the day.  This keeps Best-Execution at 4.0% but yesterday's thoughts on Best-Ex being more subjective at current levels remain in effect:

4.0% is advantageously priced at most lenders in terms of the relative cost or savings to move down or up in rate respectively (i.e. costs you more money up front to get a lower rate).  

We prefer to track best-ex rates that allow for no lender closing costs, and in the recent past, that has been an ideal fit for 3.875% rates.  But many lenders might not be able to do that at 4.0% rates, depending on your scenario.  As always, we'd recommend looking at a range of available rates and examining the costs involved in moving to higher and lower rates on the spectrum vs the difference in monthly payment to determine the best fit for you. (read more about Best-Execution calculations).  

We posed the question over the past few days: Are rates on a one-way trip higher?  We now have two decent days in a row in terms of underlying markets potentially showing signs of support.  Although that's a welcome sight, such support is a two-part event that not only requires some "defense" against further weakness, but some "offense" coming back in the other direction.  We saw a bit of that yesterday, but it more or less fizzled out today, leaving the outlook a bit less rosy heading into the last day of the week.

So, we'd continue to advocate caution against inferring future strength from the past two days of relative positivity.  While these supportive market levels could indeed continue to keep a lid on rising mortgage rates, all too often, past precedent warns that such days can merely be brief pauses running counter to broader trends.  We'll need more days of stability or improvement before we can advise anything other than a highly defensive strategy.  

Today's BEST-EXECUTION Rates

• 30YR FIXED -  4.0%-4.125%
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375%, returning to 3.25%
  
• 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
• We're currently further away from the very best levels than we have been in recent months
• We've broken away from a long, stable trend and are expecting greater volatility
• Rates could easily move higher or lower, but given the above facts, there seems to be more risk than reward regarding floating
• (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario.  There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).