Mortgage rates moved noticeably lower to begin the week, continuing a winning streak that began last Wednesday.  Today's improvement brings the total improvement over 4 days to one-eighth of a percent and also fully erases the damage done by the strong jobs numbers on Nov 8th.  In other words, today's rate sheets are as good as they've been since Thursday Nov 8th.  The most prevalently quoted conforming 30yr fixed rate for ideal scenarios (best-execution) now moves down to 4.25%.

The mortgage-backed securities (MBS) that most directly affect mortgage rates were calm and steady this morning, and only benefited from weaker-than-expected economic data.  The National Association of Home Builders and Wells Fargo released the Housing Market Index which came in at the lowest levels since June.  More important economic data arrives on Wednesday and Thursday.

Loan Originator Perspectives

"Leading up to NFP on November 8th, I suggested a defensive posture with my clients and was mostly locked up. Since that time, I haven't recommended locking, until late last week and today. I'm back on a defensive, lock-em-up posture with clients. I'd much rather be wrong with lower rates than higher." -Matt Hodges, Charlottesville Sales Manager, Presidential Mortgage Group

"Nice rally today, but many lenders have yet to pass along the improvements. We have no data being released tomorrow morning, so I like floating everything overnight." -Victor Burek, Open Mortgage

"Nice start to the week today as MBS and mortgage pricing improved. Fed speakers and minutes throughout this week will shed more light on their sentiment. We're essentially in a holding pattern at moment, sure tempting to lock in gains rather than risk giving them back." -Ted Rood, Senior Originator

Today's Best-Execution Rates

• 30YR FIXED - 4.25%
  
• FHA/VA - 4.25%-3.75% (depends heavily on lender)
  
• 15 YEAR FIXED -  3.375%
  
• 5 YEAR ARMS -  3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations

• Uncertainty over the Fed's bond-buying plans and Fiscal Policy has been making for a tough interest rate environment where we're not seeing sustained improvement unless it's a correction to even bigger deterioration.
• The Fed's bond buying is the key consideration--not just the initial reduction (aka "tapering"), but the general pace of withdrawal.  We've gone from tapering being a "sure thing" in September, to it being on hold until March 2014, and now December 2013 is increasingly possible after the most recent Employment report on Nov 8th.
• Markets continue to be most interested in economic data and its suggestions about the longer term trajectory of the economy.  This will shape expectations for Fed policy in the coming months, and thus inform the direction of interest rates.
• The stronger the data the more likely the Fed is seen as reducing asset purchases.  Rates would rise under this scenario, but the Fed indicated its cognizance of high rates creating headwinds for the recovery, and this suggests they'll attempt to keep the pace of rising rates moderate as long as inflation isn't adversely affected. 
  
• (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).