Mortgage rates were mixed, leaning toward slightly improved to begin the holiday-shortened week.  Several lenders' rate sheets were slightly worse than Friday's while a majority were unchanged to slightly better.  A worse-than-expected report on Existing Home Sales helped interest rates hold their ground.  Despite the moderate improvement overall, it hasn't been enough to affect the Best-Execution levels for 30yr Fixed, Conventional loans, which continue to hover near 3.5% since Thursday.

(Read More:What is A Best-Execution Mortgage Rate?)

Both before and after the Home Sales data, MBS (the "mortgage backed securities" that most directly affect mortgage rates) were relatively flat.  Along with Treasuries, MBS have been recovering from a sharp sell-off last Thursday which took Best-Execution from 3.375% to 3.5%.  When MBS "sell-off," it means that the price fell and yield (or interest rate) moved higher. 

While it does seem that bond markets (of which MBS are a part) were behaving a bit cautiously ahead of the three day weekend, MBS haven't been as quick to bounce back as Treasuries.  The last time Best-Execution rates rose to 3.5%, the move back in the other direction, though small, was immediate and steady.  In general, moves toward 3.5% would connote more opportunity for floating until such time that Best-Ex moves up to 3.625%, effectively breaking the range of rates that's prevailed for more than 6 months.

But in the current case, we're not seeing the same immediate, steady move back in the other direction that typically suggests we're bouncing off the high end of the range.  There's still a possibility we'll get that bounce, but it's inherently more risky to plan on such things this time around.  We'd stay more cautious than the last visit to 3.5%.  Here's a more detailed assessment of the potential "rising rate environment."

Loan Originator Perspectives

"We're continuing to lock rates for clients who are ready (meaning they've provided all of their income and asset documentation). Upside rate risk outweights downside benefit at this time. " -Julian Hebron, Branch Manager, RPM Mortgage

"MBS pricing bounced up slightly today on lukewarm data and a flat stock market. We're still in the same range, actual interest rates haven't changed, just the amount available for lenders to pay costs for borrowers. In most cases, that's the biggest day to day market change. For instance, I priced a loan on Friday and could pay $1200 of my client's costs. Today it was $1700 for the same loan. Always nice to call my clients with news like that!" -Ted Rood, Senior Originator, Wintrust Mortgage.

Today's Best-Execution Rates

  • 30YR FIXED - 3.5%
  • 15 YEAR FIXED -  2.875% - 2.75%

Ongoing Lock/Float Considerations
