Mortgage rates, fresh off a rather ugly Friday last week, continued to struggle today.  The morning hours were mostly OK.  Some lenders were in slightly better shape and others were slightly worse.  But additional weakness crept in during the late afternoon, forcing most lenders to reissue negatively revised rate sheets.  

The differences between Friday's rates and today's didn't end up being excessive (in fact, some lenders didn't reprice and are still slightly better than Friday), but it's disheartening that the semblance of morning traction was ultimately replaced with additional losses.  3.75% remains the most prevalently-quoted conforming 30yr fixed rate for top tier borrowers.  Up until Friday, that had easily been 3.625%.

Loan Originator Perspective

"The reaction from the bond market following the much better than expected jobs report took me by surprise. The trend of rates worsening before the jobs report then improving afterward might be in jeopardy. Yields have improved from the worst levels of Friday afternoon, but not as much as i would have hoped or thought. If you followed my advice of floating through the payrolls report, today's pricing is worse by about 60bps(that means if a rate was 0 points, you would now have to pay .60 points for that rate). I would recommend to continue floating at this point...the trend i mentioned above is still intact."-Victor Burek, Open Mortgage

"We’re in limbo at the moment. I doubt we stay in this range for long so I’m recommending float at the moment but with a finger on the trigger. The longer term down trend seems to remain intact but one additional strong move in the opposite will most likely break through important support levels. " -Jason B. Anker, Vice President- Loan Officer at Salem Five

"We saw some hesitant, tepid gains in bond markets today, followed by losses in the afternoon.  This is somewhat disappointing after last week's slide. Rates are still great, historically, but borrowers who got quotes last week and failed to act may not feel that way. For now, we're holding our ground. The big question is, do we go up, or down, from here. My crystal ball is broken today, so no idea here." -Ted Rood, Senior Originator

"Rated did not improve much today after Fridays blood bath. I was hoping for a strong day today which would be proof Fridays move was an over reaction. It may still be to early to tell what direction rates are now headed in but I was at the very least happy to see mortgage bonds did not continue Fridays slide. This week we have treasury actions and fed speakers which are sure to move the market. Now is not the time to gamble and try to win back some of Fridays looses. If you are closing in the coming week or 2 Lock. If you have time to see which directions things go and are willing to lock in at a higher rate or pay higher closing costs should things not work out in your favor you can float." -Manny Gomes, Branch Manager Norcom Mortgage

Today's Best-Execution Rates

• 30YR FIXED - 3.75
  
• FHA/VA - 3.25
  
• 15 YEAR FIXED -  3.00
  
• 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

• 2015 began with a strong move to the lowest rates seen since May 2013.  The catalyst has been and continues to be Europe.
  
  
• European bond yields trended constantly lower in 2014, thus playing a prominent role in keeping US rates lower than they otherwise might be.  Many feel that Europe will continue to slide until their central bank engages in US-style quantitative easing.  Some see this happening in early 2015.  In any event, we're looking for a turn in Europe, first and foremost, before worrying about the longer-term trend in bond markets being at serious risk of reversing.
  

• It's impossible to know when Europe will turn a corner, and even then it's only the sort of thing we'll be able to observe in hindsight.  That means every head-fake toward higher rates runs the risk of developing into a longer term rise, even if those risks vary greatly in terms of probability.  Clients with longer term time horizons and who otherwise don't mind losing some ground in exchange for the chance at locking even lower rates are the only ones who should float.  Clients who must close by a certain date or who can't afford to lose any ground on rates should generally be locking even though the longer term trend has been in their favor for over a year now.
  
  
• 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).