Mortgage rates moved back up today, but continue holding well-inside last week's range.  "Movement" is a relative term these days considering it's usually in reference to the closing costs associated with prevailing rates (as opposed to changes in rates themselves).  In other words, if you were quoted 4.0% yesterday, you'd likely see the same rate today, but with just slightly higher closing costs, or lower lender credit.  Incidentally, 4.0% is indeed the most prevalent conventional 30yr fixed rate quote for top tier scenarios, though several lenders are .125% higher or lower.

Tomorrow brings the release of the Minutes from the Fed's most recent meeting in late July.  The Minutes provide an opportunity for investors to glean clues about what the Fed might do at the next meeting.  If those clues paint a clear picture about a rate hike in September, rates could rise quickly.  Investors are anxious about that because of the changes in the last policy statement (where the Fed said only "some" further improvement was needed in labor markets before hiking rates). 

Loan Originator Perspective

"I continue to favor locking in this environment. The benchmark 10 year note has been unable to make new lows so I do not see much to gain by floating. Locking is the safe move especially with inflation data hitting and the FOMC minutes coming tomorrow." -Victor Burek, Churchill Mortgage

Today's Best-Execution Rates

• 30YR FIXED - 4.0%
  
• FHA/VA - 3.75%
  
• 15 YEAR FIXED - 3.25%
  
• 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.  Investors bet heavily the move lower in European rates and domestic rates benefited as well.  But with those bets finally drying up in April and with the Fed seemingly intent on hiking rates in the US, May and June saw a sharp move back toward higher rates.  The implicit fear is that global interest rates set a long term low in April, and have now begun a major move higher.
  
  
• July said "not so fast" to that potential "big bounce."  Some of the data began to suggest the Fed is still a bit too early in talking about raising rates in 2015--particularly, a lack of wage growth or any promising signs of inflation.  But Fed proponents maintain that low inflation is a byproduct of temporary trends in the value of the dollar and the price of oil, and that once these factors  level-off, inflation will ultimately return.  That side of the argument suggests that inflation could increase too quickly if the Fed hasn't already begun normalizing interest rates.
  

• With all of the above in mind, locking made far more sense for the entirety of May and June, and we were not shy about saying so.  The second half of July saw that conversation shift toward one where multiple outcomes could once again be entertained.  In other words, we went from "duck and cover!" to "let's see where this is going..."  
  
  
• Bottom line, locking is always the safest bet and it was the only bet from late April through early July.  Since then, there's been room for other points of view.  We should know a lot more about how valid those points of view are as August and September progress.
  
  
• 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).