Mortgage Rates moved slightly lower today, depending on the lender.  During the morning hours, rates were roughly unchanged and thus remained in line with the highest levels in more than 4 months.  As the day progressed, bond markets improved, resulting in fairly widespread 'positive reprices' (meaning that certain lenders issued new rate sheets with modest improvements).  After the reprices, the average lender was quoting slightly lower upfront costs for the same note rates seen yesterday.  3.625% is currently the most prevalent conventional 30yr fixed quote on top tier scenarios.

Despite the intraday improvements, rate/bond markets remain anxious.  Now that we've seen our first 2-day winning streak in the month of October, it's tempting to conclude that the recent trend toward higher rates is over.  But that would be a premature conclusion until we see how markets react to Thursday's announcement from the European Central Bank.  Bottom line, the past few days have been hopeful, but everything could still change on Thursday.

Originator Perspective

What to do what to do…  That’s a great question.  It’s either a great time to lock or a very bad time.  We’re sitting at or near the bottom of our recent range ahead of potentially market moving news out of the ECB.   It’s a good bet that this news will either push us lower into the previous range or have us bouncing higher.  You’ll wish you locked if we get the latter of the two.  Anyone looking to take on a bit of risk right now could be handsomely rewarded.  Sounds tricky I know but you should be used to that by now, no? -Jason B. Anker, Vice President- Loan Officer at Salem Five

It's encouraging that bonds posted further small gains today, but I'm hesitant to call this a trend breaker yet.  Thursday marks the ECB's next policy statement, and if their rhetoric is as bullish as the Fed's recent minutes, bonds could fall further.  While the impetus for locking may not be quite as clear as it has been, floating borrowers need to fully consider their risk tolerance.  As Dirty Harry said: "Do you feel lucky?"  -Ted Rood, Senior Originator

Today's Best-Execution Rates

• 30YR FIXED - 3.625%
• FHA/VA - 3.25-3.5%
• 15 YEAR FIXED - 2.875%
  
• 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

• Rates have generally been trending higher since hitting all-time lows in early July

• Clearly-defined uptrends provide higher-than-average motivation to lock
  
  
• Risk-takers can try to time the dips in rates that may occur during that broader uptrend, but the reward for good timing generally isn't worth the risk in these situations.
   
• We'd need to see a sustained push back toward lower rates (something that lasts more than 1-3 days) before anything less than a cautious, lock-biased approach makes sense for all but the most risk-tolerant borrowers. 
   
• 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).