Mortgage rates moved slightly higher again today.  Fed Chair Janet Yellen provided her semi-annual testimony to the Senate Banking Committee this morning.  The financial markets that underlie mortgage rates saw quite a bit of volatility during the testimony, but it ultimately canceled itself out.  This left the secondary mortgage market in roughly the same position as it was earlier in the morning.  Unfortunately, that position was a bit weaker than yesterday's latest levels which were, themselves, the weakest of the day. 

In other words, after the smoke cleared, today's market movements confirmed yesterday's weakness, pushing rates higher.  That said, none of the recent movement in mortgage rates could be considered "fast-paced."  Today's increase just barely begins pushing the boundary between 4.25% and 4.125%.  By the end of last week 4.125% was more prevalent as a conforming 30yr fixed rate quote for the best possible scenarios.  After these past two days of weakness, 4.25% is more prevalent than it was, but hasn't taken the spotlight yet.

Loan Originator Perspective

"We're still close to recent lows, and without at any compelling data on the horizon, I think locking is a very conservative decision--an approach that I would very likely embrace. Until we make a decided move out of this range, I'd float at the highs and lock at the lows." -Brent Borcherding, www.brentborcherding.com

"If you can tolerate the risk, I think floating all loans overnight is the way to go. It appears we have some good support just overhead on the benchmark 10 year note at 2.57. Float the highs, lock the lows. " -Victor Burek, Open Mortgage

Today's Best-Execution Rates

• 30YR FIXED - 4.125- 4.25%
  
• FHA/VA - 3.75%
  
• 15 YEAR FIXED -  3.375%
  
• 5 YEAR ARMS -  3.0-3.50% depending on the lender

Ongoing Lock/Float Considerations

• The hallmark of 2014 so far has been a disconcertingly narrow range in rates.  Too many market participants bet on rates going higher in 2014, and markets have punished that imbalance with a paradoxical move lower.
  
  
• As of June, rates were officially lower year-over-year, but that's due to rates' path higher in 2013.  The current path in 2014 remains sideways. 
  
  
• European markets continue to play a nagging role in the background, generally helping rates in the US remain lower than they otherwise might be. 
  
  
• From a wider point of view, we're in limbo, waiting for the first significant move away from the narrow range.  A rally into late May stood a chance to act as this break, but rates have since returned to what were previously the lower limits of the 2014 range.
  
  
• As always, please keep in mind that the rates discussed generally refer to what we've termed 'best-execution' (that is, the most frequently quoted, conforming, 30yr fixed rate for top tier borrowers, based not only on the outright price, but also 'bang-for-the-buck.'  Generally speaking, our best-execution rate tends to connote no origination or discount points--though this can vary--and tends to predict Freddie Mac's weekly survey with high accuracy.  It's safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie's once-a-week polling method).