Mortgage Rates proceeded lower again today, adding on to the already substantial improvements from yesterday.  Some of the gains reflect additional lender reprices after yesterday's RateWatch article was published, though rate sheets generally improved again today by an equal amount.  Best-Execution for 30yr Fixed Conventional Loans has QUICKLY regained the 3.5% territory with some lenders already viable at 3.375%. 

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

The fact that we've gotten back to the previous Best-Ex rates so quickly should tell you something.  Namely, further improvements such as those seen yesterday and today are less likely now that we've reached these levels.  This isn't to say that they're not possible or even that we're leaning one way or the other, but simply that there has been a big, fast push back to previous territory.  It didn't find much cause to stray very far from that range before the sell-off of the past 3 weeks and we think it will need more motivation if it's going to stray too far from it now.

The next few weeks are likely to center on current rates with a higher-than-normal amount of volatility through mid September.  For now, the trend is positive, but we saw signs of it balancing out today.  We wouldn't advocate complacency if you see a rate that you like, especially if it gets you back close to a rate you thought was "lost" just 24 short hours ago.

Long Term Guidance: We'd continue to advocate against trying to "get ahead" of current market movements due to the high degree of uncertainty.  The long-term direction of rates has been down, down, down, for the past year.  At some point, this will turn, and when it does, we highly recommend that you're prepared by drawing your OWN line in the sand as to how much rates would have to rise before you lock at a lost.  That's assuming you don't simply lock as soon as you're able.  For those with lower levels of risk tolerance who would consider movements in cost (despite unchanged interest rates) to be significant, or for those within 15 days of closing, or who are purchasing, this certainly favors locking.  We'd also consider that rates remain very close to all-time lows and uncertainty to all-time highs.  This also favors locking.

Loan Originator Perspectives

Mike Owens, Partner with HorizonFinancial, Inc.

It's a great day to be in the mortgage business. Rates are excellent. Turn times are not so be patient. By the way lock your rate.

Bob Van Gilder (BVG), Finance One Mortgage

Let's face it folks. Rates are low and will remain low for some time. Grab something the benefits you. Buy a home if so inclined. Prices seem to have leveled off in a lot of markets. (Sure, there are bank owned properties not on market yet---but...)

Matt Hodges Loan Officer, Presidential Mortgage Group

The market certainly has given us surprises over the past 3 weeks. Advice from many has been to lock at those lows. Now, as rates are drifting back lower, the the advice is reiterated - lock if you like the deal. Yes, it's possible rates improve, but desire for any positive economic news can disrupt improvements in rate, as can QEIII, if not targeted properly.

Kent Mikkola, Mortgage Consultant, NMLS 353976

We have gained back most of our recent losses. Locking looks pretty good right about now.

Victor Burek at Benchmark Mortgage

We have had quite the rebound over the last couple days. If the recent moves have made you uncomfortable, you should go ahead and lock today. As for me, my advice is to float. When comparing today's rate sheets to past rate sheets when MBS pricing was the same, it appears that lenders have held back quite a bit of the gains. Even if we move sideways from here, pricing can and should improve.

Ted Rood, Senior Loan Officer, Bank Star

Yesterday's Fed minutes release has put the possibility, if not the expectation, of QE3 back into play. Rates have improved greatly over the past few days, even without any Euro bombs hitting the fan. Even though we've just seen how fickle the markets can be, my sentiment is for further improvement at the moment.

Today's BEST-EXECUTION Rates 

• 30YR FIXED -  3.5% - 3.625%
  
• FHA/VA - 3.5% (varies more between lenders than conventional 30yr Fixed)
• 15 YEAR FIXED -  2.875-3.00%
• 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
• 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).