Mortgage rates fell more today than in recent days.  Positivity was fueled chiefly by European bond market strength as serious growth concerns persist and rates push ever-closer to their mid-October lows.  Domestically, a strong 5yr Treasury auction helped ignite an afternoon bond market rally that included mortgage-backed securities (MBS).  When MBS improve enough in the middle of the day, lenders often release new, stronger rate sheets.

This was the case today, and the improvements were good enough to bring 3.875% into the running for the most prevalently-quoted conforming 30yr fixed rate for top tier scenarios.  As of this afternoon, it's just barely edging out 4.0%.  That's the first time we've seen the most common top-tier rate quote in the 3's since October 21, and one of only a handful of times since May 2013.  The takeaway is that rates are very strong here, and while further improvements are just as possible as not, they're also more worth protecting if you have the ability to lock.  That's the suggestion made by past precedent anyway.

Loan Originator Perspective

"Higher demand for US Treasury Bonds of late is helping rates for now. Whether this trend continues and takes us out of a tight range we've been in for a month or so remains to be seen. Floating your rate for now seems safe to try and reach shorter and more price friendly lock terms but borrowers should be watchful of market changes and be ready to pull the trigger." -Hugh W. Page, Mortgage Banker, Seacoast Bank

"Today was the best we've had in a while.  It's easy to fall in love with the current trend in rates, which has been positive pretty much all month.  But it's good to keep in mind that these holiday weeks can often be outside the scope of the longer term trend.  Next week brings a new month packed with holidays and always important market moving economic data.  I still feel hopeful about the longer term trend, but I wouldn't take any chances if you're closing in 15 days or less." -Constantine Floropoulos, Quontic Bank

"My gut said float yesterday and now I'm looking at some small improvements that could very easily continue. I would still favor floating, as simply prices holding where they are today, could very easily save you some tomorrow. " Brent Borcherding, brentborcherding.com

"Yesterday, I altered my recent opinion to lock all short term closings and said to float all loans overnight in hopes today's auction was well received. The auction turned out to be just as strong as yesterday's which signals a good chance that tomorrow's auction of 7 year notes is also as strong which is good for mortgage rates. However, tomorrow is the last full day of trading ahead of the Thanksgiving holiday. Lenders tend to be conservative with pricing ahead of long weekends. My advice today is to go ahead and lock short term closings and float all other loans. If locking today, wait to lock as late as possible to allow lenders time to pass along today's post auction gains. Keep in mind, if you do not lock today you should go ahead and assume you are floating until next week." -Victor Burek, Open Mortgage

"Mortgage bonds were higher today bringing down home loan rates. With another strong treasury auction it does appear there is an appetite for US debt out there. If this continues we should see rates continue to decline. For now keep floating and enjoy the better pricing." -Manny Gomes, Branch Manager Norcom Mortgage

Today's Best-Execution Rates

• 30YR FIXED - 3.875-4.0
  
• FHA/VA - 3.5
  
• 15 YEAR FIXED -  3.125-3.25
  
• 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.  After correcting back to 4.125% briefly, November saw a calm, supportive trend that helped establish a ceiling.  From there, rates trickled back down into the high 3's by the end of the month.
  
  
• 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).