Mortgage rates fell at a healthy pace today, bringing them to the lowest levels since September 9th.  Gains in bond markets help rates move lower and bond markets were stronger right from the outset today on a combination of factors.  Determining the most prevalently-quoted conforming 30yr fixed rate for top tier borrowers is more of a toss up at current levels with 4.25% and 4.125% sharing roughly equal territory.

Loan Originator Perspective

"As long as we remain under 2.5% yield on the 10 yr treasury, I'm suggesting floating....for now. With a yield under that level, we've just reentered the long term downward trend channel. We'll need to see a few days worth of confirmation for me to be confident rates will continue lower, because this could just be a test and rates move right back up. Float cautiously, and as always, be ready to lock." -Brent Borcherding, www.brentborcherding.com

"If you have been floating for the past week or so, you have been fairly well rewarded. I have favored floating as month/quarter end tends to favor rates. With tomorrow marking end of month, we are on to looking at economic data. We have non farm payrolls at the end of the week which could spark a movement one way or the other. My advice would be to lock all loans by end of day tomorrow. It is way to risky to float through the payroll report on Friday. I think starting Wednesday, we give back some of the gains we have enjoyed over the last few days as the market prepares for the coming data. Then the direction of rates will be dictated by the payrolls report and revisions to prior month. If jobs are better than expected with positive revisions, rates will be pressured higher but if worse than expected we should see rates continue to move lower. I think the best day to lock this week will be tomorrow. This could all change if we get some kind of tape bomb due to the geopolitical risk floating around the world." -Victor Burek, Open Mortgage

Today's Best-Execution Rates

• 30YR FIXED - 4.25
  
• FHA/VA - 3.75-4.0%
  
• 15 YEAR FIXED -  3.375-3.5
  
• 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 are now lower year-over-year, but that's mostly due to rates' path higher in 2013.  The current path in 2014 remains sideways, though it has recently approached (but not broken) the lows set in late May
  
  
• European markets continue to play a prominent role, 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.  While top tier rates moved up an eighth of a point in early September, to truly move out of the "narrow range," we'd need to see another .125% higher (best-execution at 4.375%)
  
  
• 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).