Mortgage rates fell to new 3-Month lows today.  That makes this the 11th straight day where rates have held steady or moved lower.  Conforming, 30yr Fixed rates remained at 4.375%  (best-execution) for most lenders with the improvements coming in the form of lower closing costs or higher lender credit.  Some lenders are efficiently priced at 4.25% as well.  

As we noted yesterday, the burden of proof is on the scheduled economic data when it comes to determining whether or not the Fed is likely to move back toward its previous stance on tapering.  In simpler terms, if the data says the economy isn't improving enough, the Fed is justified in continuing to hold off.  As long as they hold off, interest rates benefit in general.   This was generally the case today as the economic data was roughly in line with expectations.  Tomorrow is another chance for the same thing to happen, but be aware that if the data is stronger than expected, rates will likely move higher.

Loan Originator Perspectives

"We were greeted this morning with slightly worse rate sheets from lenders. Throughout the day, MBS have moved higher and many lenders have repriced for the better. In my opinion, between now and the employment report next week, sizable gains will not be seen nor will a sizable sell off. That said, i would lock today if you are within 15 days of closing. I would float all other loans day to day." -Victor Burek, Open Mortgage

"Rates continue their slog lower. Not in 3's again so those of you who missed out on a "lifetime" refinance, just go about your business. Those of you currently looking to buy and or refinance...strike while the Iron is hot." -Bob Van Gilder, Finance One Mortgage

"Yes, we've seen slow improvement of rates over the past couple of weeks. I'd like to feel confident of future improvements, but I'm not. For clients in the 30-35 day time-frame prior to close and even some out to 60 days, I'm recommending locking. For those lenders offering renegotiation options, all the better. Playing defense still until I have reason to be more optimistic." -Matt Hodges, Charlottesville Sales Manager, Presidential Mortgage Group

"As mentioned yesterday, the trend is the trend until it's not the trend anymore, and it continued today with moderate gains. We were certainly overdue for increased demand after the summer selloff debacle endured by borrowers and loan officers, and the past two weeks have been kind to rate markets. We'll take slow and steady gains over huge price volatility any day, far easier for borrowers, loan officers, and secondary departments to cope with than huge daily price swings as seen in June/July." -Ted Rood, Senior Originator, Wintrust Mortgage

"Another great day at the office. Overall the data has been bond friendly, the auctions have been bond friendly, the rumors have been bond friendly, and the technicals are turning in our favor. Matt Graham's "The Day Ahead" article this morning really nailed the critical bullet points and illustrated the technical averages that are critical for anyone who is an originator, secondary, or a consumer looking for a mortgage. The trend continues to be our friend. Floating is the best option here. Tomorrows employment/jobs data will be important, but next Friday's NFP will hold the most weight. I think the market continues this trend into next weeks report." -Constantine Floropoulos, Quontic Bank

"Steady gains like we've seen recently are a reason to be pleasantly surprised after the last few months of nothing but higher rates. I feel the 4% line in the sand could be crossed in the next few weeks as the bond market experiences a correction of sorts. Yields rose too quickly in anticipation of tapering that has yet to happen. Maybe this trend will continue. Data is the key and the FED must not be too impressed with what they see to take the training wheels off yet." -Mike Owens, Partner, Horizon Financial Inc.

Today's Best-Execution Rates

• 30YR FIXED - 4.375%
  
• FHA/VA - 4.25, Some Lenders are Lower
  
• 15 YEAR FIXED -  3.5%
  
• 5 YEAR ARMS -  3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations

• Uncertainty over the Fed's bond-buying plans is causing immense volatility in rates markets and generally leading rates quickly higher 
• Expectations for "tapering" (a reduction in "QE3" asset purchases) mounted over the summer and September 18th was seen as the most likely day for a potential tapering announcement
• But the Fed decided to keep a change in QE amounts on hold until the economy could more convincingly show that rising rates (which had been rising because markets expected the Fed to taper!) wouldn't be too big an impediment to further improvement. 
  
• That's resulted in the first meaningful "pause" in the "rising rate environment" since it began in earnest in May, 2013.   This won't necessarily be an ongoing move in the other direction, and we're nowhere near May's rates yet, but it's a good opportunity to get back in the market if rising rates pushed you out sometime between now and then.
  
• The extent to which that remains true relies on incoming economic data.  Strong data will increase the speculation that the next Fed meeting will contain a reduction in purchases
• (As always, please keep in mind that our Best-Execution rate always pertains to a completely ideal scenario.  There are many reasons a quoted rate may differ from 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).