This week hadn't been too traumatic for mortgage rates through yesterday afternoon, but neither had it been positive in any noticeable way.  That changed today as rates fell abruptly to the lowest levels since last Monday.  Granted, at the time, last Monday's rates were still pretty close to the worst in 7 years, but the point is that we've managed to find our way back from the even higher rates that followed.

Help came chiefly from European political developments where Italy is a day or two away from confirming a government that could end up pushing the country out of the Eurozone.  Even though that's far from guaranteed, the mere risk of such a thing is enough to drive investors toward safer haven bonds like those issued by Germany or the US.  In general, excess demand for bonds means rates move lower.

Loan Originator Perspective

Take advantage of the improved pricing and get locked in.   Not sure bonds can continue with this rally much further so much more to lose than to gain by floating. - Victor Burek, Churchill Mortgage

The still of the Night can be Scary. Not sure what to make of the flatness of Rates at this time. Still locking at Origination. -Al Hensling

Today's Most Prevalent Rates

• 30YR FIXED - 4.75%
• FHA/VA - 4.5%
• 15 YEAR FIXED - 4.25%
  
• 5 YEAR ARMS -  3.75-4.25% depending on the lender

Ongoing Lock/Float Considerations 

• Rates have been moving higher in a serious way due to headwinds that cannot be quickly defeated.  These include the Fed's increasingly restrictive monetary policy outlook, the increased amount of Treasury issuance to pay for the tax bill (higher bond issuance = higher rates), and the possibility that fiscal stimulus results in higher growth/inflation.
  
  
• While we may see periodic corrections to the broader trend toward higher rates, it's safer to assume that broader trend can and will continue.  Until that changes, it makes much more sense to remain heavily-biased toward locking as opposed to floating.

• Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders.  The rates generally assume little-to-no origination or discount except as noted when applicable.  Rates appearing on this page are "effective rates" that take day-to-day changes in upfront costs into consideration.