Mortgage rates are looking like they've exhausted the playbook in terms of making big moves down the field, yet they continue to pick up a few yards every play.  Today was one of the less effective recent examples.  More than a few lenders are priced right where they were at the end of the day yesterday, despite underlying markets suggesting a bit more improvement.  That said, the AVERAGE lender is in slightly better shape today.  We're now seeing a more even split between 4.0 and 4.125 in terms of the most prevalent  conventional 30yr fixed quotes for top scenarios.

It continues to be the case that recent resilience has balanced the bigger picture outlook.  Whereas our backs were clearly against the wall at the beginning of last week, we can now catch our breath and consider that things could actually improve (as opposed to simply wondering how long it would be before they got worse again).  This is the first time we've entertained a change to the big-picture outlook since late April.  As such, there is heavy caveat about the fact that this shift is still too new to bank on, and that we still need to see more pronounced gains before considering that.

Loan Originator Perspective

"Rates continue to modestly improve despite the economic data being strong. A Reuters poll this morning even showed most economists are expecting a rate hike in September which should be negative for rates. I am still very cautious of the current environment and think locking is the way to go. The gains have been minimal as rates usually fall very slow but they rise very quickly. Only float if you can afford to be wrong." -Victor Burek, Churchill Mortgage

"Rates continued trudging lower today, and the benchmark 10 year treasury broke some significant resistance to hit 2.28 in afternoon trading. MBS didn't see the same magnitude of improvement, which is not that unusual. We're approaching our best pricing since July 8th, which was better than all of June. Today's gains came in spite of, not due to, economic data, which makes the move even more meaningful. I'm tempted to float here, for borrowers with some risk tolerance. There's certainly no shame in locking while rates are near one month lows, as well." -Ted Rood, Senior Originator

Today's Best-Execution Rates

• 30YR FIXED - 4.0-4.125%
  
• FHA/VA - 3.75-4.0
  
• 15 YEAR FIXED - 3.25%-3.375%
  
• 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 was Europe and the introduction of European quantitative easing.  The next four bullet points are currently more of a reflection about the first half of the year.  July still has a chance to be the month where rates held their ground against 2015's initial push higher.
  
  
• It's a highly uncertain time for global financial markets.  There is much debate over whether or not the global economy is turning a corner (for the better), thus justifying a widespread move to higher rates.  That's made 2015 significantly more volatile than 2014 for markets.  This means lender rate sheets may change appreciably from day to day, and sometimes even several times in the same day.
  

• Bottom line: European Quantitative Easing helped push global rates to all-time lows in April.  Now, the big risk for mortgage rate watchers is that we might have turned a long term corner.  That risk is being compounded by speculation about the Federal Reserve raising rates by the end of 2015.
  
  
• May and June have amounted to the 2nd major move higher bounce so far this year.  Every time this happens, we have to consider the possibility that this will be a big-picture, long-lasting correction.  Until such a thing can be ruled out, Locking makes far more sense.  July has thus far provided an opportunity to consider such a big-picture correction might be on hold. 
  
  
• 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, conventional 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).