Mortgage Rates are on an undisputed tear, moving more today than any day in the past 3 weeks of progressive movement into new all-time lows.  The week began much like the previous week ended, with concerns over the European financial system pulling all manner of 'safe-haven' bond yields lower, among them MBS (the Mortgage-Backed-Securities that most directly influence mortgage rates). 

Once again, there was nothing on the domestic economic calendar and corporate earnings had little effect next to news that a third region in Spain will now request assistance from Spain's central government.  Combined with a glut of generally gloomy news overnight, 10yr Treasury yields hit new record lows before domestic trading commenced.  The balance of the day has simply seen rates move in narrow, sideways patterns near these extreme levels.  

Even though Friday had been fairly brisk in terms of the pace of improvement for mortgage rates, today was brisker in most cases.   Best-Execution rates for 30yr Fixed, Conventional loans are a foregone conclusion at 3.5% and there's an even stronger case for 3.375% at some lenders.  That said, 3.5% continues to be a more efficient combination of rate and fee at most lenders.

(Read More:What is A Best-Execution Mortgage Rate?)

Long Term Guidance: We'd continue to advocate against trying to "get ahead" of current market movements due to the high degree of uncertainty.  In the past, we would have interpreted that advice as a suggestion to lock, but in the recently "low and sideways" environment, it's probably better-read as a suggestion to go with the flow of gradually lower rates until we see the pattern definitively break.  It's a reasonably safe assumption that European concerns will generally continue to apply downward pressure on rates although there are no guarantees that the right piece of news or economic event couldn't mark "the turning point" at which rates bottom out.  On any given day, rates have been at or near all-time lows and in the grand scheme of things, unable to move lower as quickly as Treasuries for example.  So although there is potential gain from floating, it's still a historically excellent time to lock if you'd prefer to take the risk off the table.  

Loan Originator Perspectives

Ira Selwin, Vice President Of Secondary Marketing, US Mortgage Corporation

I have officially changed my thoughts from "Lock" to "Float". I feel that right now is the time to float, but always have your Loan Officer ready to lock your loan at a moments notice in case things turn the wrong way.

Victor Burek at Benchmark Mortgage

If you have been following my advice(i said Friday don't lock anything), it is the same today as it has been. Float until you are within 15 days of closing, then lock. Yes, rates might edge a little lower during that 15 days, but at some point you must lock. Don't make the mistake of trying to time the bottom as the only way to know rates are at rock bottom is once they have passed, but then it is too late.

Julian Hebron, Loan Agent, Branch Manager, RPM Mortgage

Sticking to the plan I laid out last with all clients. It's the safest way to manage a declining but unpredictable rate environment. Here it is: Locking purchases as they ratify to capture current lows for clients whose purchase contracts dictate a specific timeline. Decisions to lock refis are specific to each client. If they’ve recently closed a purchase or previous refi (thus rate is only slightly higher than current market), it’s either a float or a no-cost refi depending on breakeven math for closing fees spent previously. If they haven’t refinanced in awhile (thus rate is much higher than current market), it’s a lock—whether those locks are cost or no-cost also depends on math best suited to client profile and expected time horizon in the loan and/or home.

Today's BEST-EXECUTION Rates 

• 30YR FIXED -  3.5%, Some Approaching 3.375%
  
• FHA/VA - 3.25-3.5% (varies more between lenders than conventional 30yr Fixed)
• 15 YEAR FIXED -  2.75 - 2.875%
• 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
• Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
• But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.
• (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).