Mortgage rates moved slightly higher on Monday, though there were no material market movements driving the change.  Lenders are erring on the side of caution heading into the Christmas holiday.  Bond markets (which encompass the Mortgage-Backed-Securities that most directly influence rates) are only open for a half day today and are fully closed tomorrow.  The fact that markets are open for a half-day today doesn't mean much as activity has been even lighter than past examples of holiday-shortened sessions.  Best-Execution is unchanged at 3.3375%, though borrowing costs edged slightly higher.

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

The dramatically slower than usual market conditions seem to make sense in the context of recent events.  Even though the ultimate outcome of the Fiscal Cliff debate isn't likely to change the landscape of mortgage rates in  the long term, all corners of financial markets are resigned to pay attention to Fiscal Cliff developments as the core issue heading into the end of 2012.  Whether or not it will have been justified in hindsight is questionable, but unquestionably, that's where the focus is.  As such, there's not much reason to be tuned in to Fiscal Cliff developments with Congress out until at least the 27th.  The last three days of the week stand a better chance to see some connectivity between events and rates, for better or worse.

Today's Best-Execution Rates

• 30YR FIXED - 3.375%
  
• FHA/VA - 3.25% (varies more between lenders than conventional 30yr Fixed)
• 15 YEAR FIXED -  2.875% - 2.75%
  
• 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, but uncertainty surrounding the Fiscal Cliff is applying upward pressure.
• Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
• This 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).