Mortgage rates moved moderately lower again today, setting another new low for the month of November.  That said, the movement has been primarily restricted to the upfront costs associated with the same old rates.  In other words, the most prevalent contract rates remain 4.0% or 4.125% for top tier borrowers, but the upfront costs for those rates are a bit lower than they were on Friday.

The bond markets that dictate mortgage rate movement were almost perfectly flat today after some volatility in the morning.  While we didn't end up seeing a meaningful attempt to get to stronger levels, simply holding Friday's ground is a positive change.  It contributes to a trend that is currently more sideways and supportive compared to the trend in the second half of October which was characterized by slow, steady weakness.

Loan Originator Perspective

"Today is a great example of the market being range bound. We started the day testing the lower realm of the recent range, which was quickly rejected and we started trading back to the middle of the range. In my opinion this is good, as long as we don't break above the upper support level of the range, as the range serves as a guide to determine day to day rates. We can put a few numbers on it, but generally I would say 2.30-2.40% (rounded up/down) on the US 10 Treasury yield. Floating is a great scenario within this range to buy time to be within a closer date of closing to reduce the costs associated with your rate. Within 15 days I firmly believe should be closed." -Constantine Floropoulos, Quontic Bank

"Yields were unable to make a big move lower this morning, but they have held at support. The long term trend pointing toward lower mortgage rates continues to hold. I am back to my advice of floating all loans until you are within 15 days of funding and then locking. A 15 day lock will render you the best possible pricing." -Victor Burek, Open Mortgage

While Mortgage bonds opened higher and drifted lower during today's trading session we were able to keep all of Fridays gains and close above key level. It looks to me as if the market is setting its self up for a bond rally. Float for now as things unfold but do stay cautious and check in daily." -Manny Gomes, Branch Manager Norcom Mortgage

Today's Best-Execution Rates

• 30YR FIXED - 4.0-4.125
  
• FHA/VA - 3.5-3.75
  
• 15 YEAR FIXED -  3.25
  
• 5 YEAR ARMS -  3.0 - 3.50% depending on the lender

Ongoing Lock/Float Considerations

• The hallmark of 2014 has been a narrow range in rates.  Too many market participants bet on rates going higher in 2014, and markets punished that imbalance with a paradoxical move lower.
  
  
• European markets helped that process along and continue to play a prominent role in keeping US rates lower than they otherwise might be.  

• For most of the Summer and early Fall months, rates held a narrow range of 4.125% -4.25% (essentially where the 2014 rate recovery has bottomed out) and finally broke to a 3.875%-4.0% range in mid-October.  It's too soon to tell if this is a brief window of opportunity or the continuation of 2014's very gradual improvements.
  
  
• 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).