Mortgage Rates held steady today, continuing a much-needed break from the move higher that dominated the first 2 weeks of October.  While we've only seen modest improvements (or in today's case, a mere absence of deterioration), it's been enough to get the average lender back below last week's best levels.  3.625% remains the most prevalently-quoted convention 30yr fixed rate on top tier scenarios, though there are a few lenders at 3.5%.

In terms of underlying market movement, the past 2 days have been much calmer than they might have been.  Expectations for volatility centered on the European Central Bank (ECB), and the risk that it would say something about reducing its bond buying program at yesterday's press conference.  A reduction in the program would imply higher rates around the world, and indeed, the associated fears are part of the reason rates have been rising in general.  But the ECB abstained from official comment and anecdotally has promised to let us know in early December.

That means interest rates of all shapes and sizes are at a bit of a loss when it comes to inspiration--a fact that's evident in today's uninspired bond market trading.  Risk and reward thus decreased when it comes to lock vs. float decisions.  

Originator Perspective

Pretty boring few days in the bond markets.   The benchmark 10 year note has made several attempts to break through resistance at 1.73 but so far it has held.  With yields not moving lower, there isn’t much benefit in floating.  If you are happy with the current terms and are within 15 days, I would advise that you consider locking.  -Victor Burek, Churchill Mortgage

Bond prices held virtually unchanged, and my pricing mirrored yesterday's.  I still don't see any looming impetus for a meaningful bond rally, and believe we just bought more time at current levels.  Floating MIGHT yield some marginal improvements, the question is whether you want to accept the equal risk of losses.  It's a tossup in my eyes, and in this circumstance I say tie goes to locking. -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).