Mortgage rates pulled back to slightly higher levels today as broader markets underwent a correction from relatively frenzied movement over the past few days.  Yesterday we discussed how mortgage rates have a hard time keeping pace with interest rate benchmarks (like Treasuries) when the latter are moving lower much more quickly than normal.  The other side of that coin is that mortgages tend to hold their ground better when those benchmarks are moving quickly in the opposite direction.  That's what happened today.

The net effect was a moderately weaker day that left 3.625% intact as the most prevalently-quoted conforming 30yr fixed rate for top-tier scenarios.  As of yesterday, 3.5% had been gaining some ground, but lost just as much today.  Also worth keeping in mind is the fact that volatility typically results in lenders being much more stratified.  In other words, what's true for one lender (or even 'on average') in terms of how their rate sheet changed from yesterday or during the day, may not even be remotely true for another.

For the sake of perspective, it's important to remember that, apart from the past 2 days, today's rates are still the best  in over 20 months.  While that's no guarantee that rates couldn't move higher next week, it does mean that this was a winning week despite today's specific defeat.

Loan Originator Perspective

"Mortgage Rates should have improved or at least stayed at the same level after a negative CPI came in as expected, right? It's not about US data, right now, and as I've been quickly as Europe's troubles can lead to our gains...those gains can be taken away. Right now locking, is the best and smartest decision. LOCK." -Brent Borcherding,

"Days like today are never welcomed, but we have to factor in all the improvements we have benefited from over the last couple of weeks, and really the overall bullish trend we are currently in for quite some time. Locking today does not make much sense to me as we should at the very minimum get some relief from today's selling next week. Selling a stock during a bloodbath is a losers trade, and the same bodes for locking in today. I would float until next week and see where we land. I wouldn't be surprised to see rates set even lower lows in the next couple of weeks, I'm banking on it." -Constantine Floropoulos, Quontic Bank

Today's Best-Execution Rates

  • 30YR FIXED - 3.625
  • FHA/VA - 3.25
  • 15 YEAR FIXED -  3.0
  • 5 YEAR ARMS -  3.0 - 3.50% depending on the lender

Ongoing Lock/Float Considerations

  • 2015 began with a strong move to the lowest rates seen since May 2013.  The catalyst has been and continues to be Europe.