Mortgage rates moved slightly lower for the third straight day and have now spent 4 days without moving higher.  Like the previous two business days, the improvements were modest.  That said, they are beginning to add up.  Most lenders are more than halfway back to the rates seen before this month's jobs report, which marked an acceleration in the broader rate spike that began in late October. 

To quantify this (and to oversimplify the fairly complex and diffuse rate-quote landscape), the average 30yr fixed rate was closer to 3.75% on October 27th.  It had risen to nearly 4% by the day before the jobs report, and finally approached 4.125% in the following days.  The recent gains bring us back down to 4.0% though some lenders are still quoting 4.125% on conventional 30yr fixed loans.  As always, keep in mind that we're talking about a relatively perfect scenario with no big adjustments for occupancy, credit, or cash out.  Expect rate quotes to be much higher depending on these factors.

Loan Originator Perspective

"Mortgage bonds traded in narrow range with no conviction as to which direction they wanted to head in.  I think we may see more of the same tomorrow and finally see a break come Wednesday with the release of the Fed minutes.  It may be worth it to float unless the market deteriorates and then make the decision to float or lock on Wednesday." -Manny Gomes, Branch Manager Norcom Mortgage

"The benchmark 10 year note has been able to break 2.27 today, but does not want to move much lower.  We need confirmation tomorrow by holding below this key level.  Rate sheets are marginally better today, so if you have been floating you can lock in the gains today.  I think if you can tolerate the risk, I would continue to float and see what tomorrow brings." -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 has been largely about rates rising unevenly from a long-term low brought about by the onset of quantitative easing in Europe.  In May and June, the Fed increasingly began telegraphing a 2015 rate hike.  At that point, the "rising rate environment" seemed like a sure thing, but the Fed's plans hit several snags.  Economic data began deteriorating at home and abroad, causing markets to rethink the higher rate rhetoric.  Mortgage rates hit 6 month lows at the end of October, just as the Fed surprisingly changed it's policy statement to specifically suggest December as a rate hike possibility (something they haven't done since 1999).
  

• In the bigger picture, rates had been at a crossroads, trying to determine if they would move back to 2015 highs or if the late summer swoon was merely the first wave of a longer campaign.
  
  
• While there is still plenty of room to be concerned about increasingly weak global economic growth, that's not a solid enough reason to float in this environment.  With the Fed almost certainly on track for a December rate hike, there is much  more risk that rates move quickly higher vs quickly lower.  The big picture global malaise can serve as the basis for long term hope, but in the short term, assume upward pressure on rates when formulating your strategy.
  
  
• 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).