Mortgage rates didn't move much today, depending on the lender.  Lenders that reissued improved rate sheets yesterday afternoon are generally in the same territory or slightly worse.  Lenders that did not reprice yesterday are slightly better today.  On average, rate sheets are close to 'unchanged' with 3.875% remaining the most prevalently quoted top tier, conforming, 30yr fixed rate.  Lower rates are available, but require higher upfront fees.

The fact that rates held steady today is a welcome development considering the market headwinds.  The mortgage-backed-securities (MBS) that most directly influence mortgage rates tend to suffer in the face of stronger economic data, and this morning's Retail Sales report was very strong.  While that did cause weakness in MBS initially, it wasn't the only factor in play.  As has been the case frequently in 2014, European markets were informing domestic trading until mid-day. 

The conclusion is that domestic markets may not have been as impressed with Retail Sales as it might have seemed.  The only reason this is important to us is that it helps us identify the most relevant risks on the calendar.  For example, we shouldn't assume a lack of potential volatility simply because there are no domestic economic reports on the calendar.  Bottom line: rates are low, and volatility isn't.  While there's no reason to believe the longer-term trends are damaged, such instances of periodic lows serve as good short-term lock opportunities.

Loan Originator Perspective

"The relief rally following the last auction of the week didn't materialize like i hoped possibly due to the stronger than expected Retail Sales report. Nonetheless, pricing today is basically identically to yesterday. As of 2pm eastern, MBS have managed to regain most of the days early morning losses. With no US data hitting tomorrow, and all auctions complete, i favor floating overnight to see if MBS can improve tomorrow." -Victor Burek, Open Mortgage

"Bit of a blah day today, as we swung from small gains to losses, then back again. Nothing earth shaking, and only 1 price worsen was reported on MBS Live as of 2:30 EST. The long term trend is still intact, and pointing to lower rates. The short term trend for now is TBD. I'll be locking conservative clients' loans, and reviewing lock/float options with my other clients. " -Ted Rood, Senior Loan Originator, MB Financial Bank

Today's Best-Execution Rates

• 30YR FIXED - 3.875-4.0
  
• FHA/VA - 3.25-3.5
  
• 15 YEAR FIXED -  3.125
  
• 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).