Mortgages Rates over the past two days have done much to make ground lost leading up to Yesterday's FOMC Announcement.  After further improvements today, rates further solidified their reentry into 3.875% 30yr Fixed Best Execution levels.  (for detail on what that means, READ THIS POST from a few days ago).  The rounded average of various lenders' Best-Ex rates had moved up to 4.0%, and more than a few lenders are still well-priced there, but a majority are once again offering 3.875% with attractive borrowing costs. 

Yesterday's FOMC Announcement (Federal Open Market Committee or simply "The Fed") which surprised some market participants with it's inclusion of new verbiage describing how long the Fed anticipated that it would keep its "Fed Funds Rate" at so-called "exceptionally low levels," continues to be the primary driver of the bond market rally.  When the broader bond markets are rallying like this, MBS (the "mortgage backed securities" that most directly affect mortgage rates) tend to rally as well.  Most of the overnight news out of Europe as well as domestic economic reports garnered much less-than-standard levels of attention as markets continued adjusting to the new realities of the Fed's shift in verbiage from "mid-2013," to "late-2014." 

We said yesterday that, while the FOMC Announcement definitely helped rates break recent trends at 4.0% Best-Ex, it would be up to the rest of the week to solidify the rebound.  Cross the first half of that task off the list...  4.0% Best-Ex is increasingly looking like an outlying exception to a broader trend at 3.875%.  (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario.  There can be all sorts of reasons that your quoted rate would not be this low, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).

Today's BEST-EXECUTION Rates

• 30YR FIXED -  3.875% mostly, with a few lenders at 4.0% still
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375% and more 3.25's
  
• 5 YEAR ARMS -  2.625-3.25% depending on the lender
  

Ongoing Lock/Float Considerations

• Rates and costs continue to operate near all time best levels
• Current levels have experienced increasing resistance in improving much from here
• There are technical reasons for that as well as fundamental reasons
  
• Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
• While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
• But that will always be the case when rates operating near historic lows

Mortgages Rates spent 2 days at 4.0% in terms of rounded average "Best-Execution" rates (for detail on what that means, READ THIS POST from a few days ago).  Today, that rounded average has returned to 3.875%.  Although the underlying average isn't as low as it's ever been (3.88 vs 3.82), lenders tend to price loans in 1/8th (.125%) increments, meaning that 3.875% has been the lowest sustainable best-execution rate.  In short, we're back to the promised land. 

The improvements came on the heels of today's FOMC Announcement (Federal Open Market Committee or simply "The Fed") which surprised some market participants with it's inclusion of new verbiage describing how long the Fed anticipated that it would keep its "Fed Funds Rate" at so-called "exceptionally low levels."  Until today, this verbiage read "through mid-2013," but is now changed to "through late-2014."  Markets weren't necessarily expecting the inclusion of the word "late," and although mortgage rates would have likely improved with a simple mention of 2014, the "late" part added fuel to that fire.  

While this indeed breaks the sideways trend at higher rates over the past 2 days, it's up to the rest of the week to solidify the rebound.  In essence, markets will have an opportunity to respond to the eternal question: "is that your final answer."  While the data through the end of the week doesn't possess the gravity of today's FOMC announcement, it could be enough to nudge the Best-Execution rate back to 4.0% depending on how it's received.  In that sense, the risk posed by one singular event today is replaced by the risk posed by a group of events tomorrow and Friday.  3.875% is just barely back in the picture today, but it's too soon to say whether or not the past two days at 4.0% were the exception to a long-term trend, or the beginning of a new one. 

Today's BEST-EXECUTION Rates

• 30YR FIXED -  3.875% mostly, with a few lenders at 4.0% still
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375% and more 3.25's
  
• 5 YEAR ARMS -  2.625-3.25% depending on the lender
  

Ongoing Lock/Float Considerations

• Rates and costs continue to operate near all time best levels
• Current levels have experienced increasing resistance in improving much from here
• There are technical reasons for that as well as fundamental reasons
  
• Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
• While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
• But that will always be the case when rates operating near historic lows

Mortgages Rates are steady to slightly improved today after rising for the first time in a month yesterday.  Although rates change slightly every day, those changes are usually small enough as to only effect the closing costs associated with a particular rate.  Because of this, we track "Best-Execution" as the actual interest rate benchmark, and we talked about it in significant detail yesterday (READ MORE).  So although we are able to report that the rate environment is slightly improved today, those improvements have been mostly relegated to minor decreases in borrowing costs for what will likely be the same rate you would have been quoted yesterday. 

Underlying markets have been fairly equivocal for the past two days with a majority of the damage to mortgage rates having occurred with last week's market movements that lenders more fully priced into rate sheets yesterday.  Stocks, Bonds, and MBS (the "mortgage-backed-securities" that most directly influence mortgage rates) are all very close to where they were last night, seemingly in preparation and anticipation of several important events tomorrow. These include the FOMC Statement (Fed "rate decision," although it's the text of the announcement that is important as no change is expected to the discount rate), the first-ever release of FOMC members forecasts, a post-announcement press conference from Ben Bernanke, as well as the 5yr Treasury Note auction. 

Tomorrow's events, taken in conjunction with tonight's State of The Union address presents quite a bit for mortgage markets to digest.  The speech tonight may contain mention of new housing-related initiatives (some have suggested), and similar suggestions have been made about tomorrow's FOMC Announcement (which would be a MUCH bigger deal as far as influencing mortgage markets).  Conversely, it's possible that some recent levity for MBS vs Treasuries is due to the EXPECTATION that the Fed will add some extra MBS-Specific quantitative easing in the near future, meaning that rates could face some added pressure if MBS are NOT specifically mentioned, although that's not likely to cause sufficient movement tomorrow for Best-Execution to rise.  Whatever happens tomorrow, it's a high-risk set of events that could push rates higher OR lower, but we'll hopefully come away from it with a clearer sense of whether or not rates will make it back down to a 3.875% Best-Execution any time soon.

Today's BEST-EXECUTION Rates

• 30YR FIXED -  4.0%, 3.875% still a contender
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375%
  
• 5 YEAR ARMS -  2.625-3.25% depending on the lender
  

Ongoing Lock/Float Considerations

• Rates and costs continue to operate near all time best levels
• Current levels have experienced increasing resistance in improving much from here
• There are technical reasons for that as well as fundamental reasons
  
• Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
• While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
• But that will always be the case when rates operating near historic lows
  

For the first time in over a month, the Best-Execution rate for 30yr fixed mortgages rose from a rounded average of 3.875% to 4.00% today.  The underlying borrowing costs associated with 3.875% didn't rise by a significantly painful amount, but the small increases across the board, combined with one huge move by a huge lender, was enough to bring the average rate closer to 4.0% than 3.875%.   

You may well wonder what the heck this all means.  So we'll go into more detail tonight for enquiring minds.  Our methodology for determining daily Mortgage Rates is somewhat complex, and involves an objective component based on lenders raw prices as well as subjective impression from our network of originators.  We look at the rate sheet offerings from most major lenders and calculate the buy-ups and buy-downs between each rate (incidentally, rates tend to be offered in .125% increments, which is why we're always conveying best-execution in .125% increments whereas the actual daily average is reflected on the Mortgage Rates page). 

Sometimes, the "sweet-spot" is obvious from looking at lenders raw pricing.  For example, For each .125% lower in rate, you'd have to pay more and more in terms of closing costs (which could be referred to as "discount" or "origination" or "points" among other things, but I'd greatly like to stay out of semantics debate and instead focus on the spirit of the matter.  Bottom line: it costs more money up front to pay a lower rate over time, whatever a lender wants to call that fee).  If it cost 0.4% of the loan amount to move down from 4.125% to 4.0%, another 0.5% to move to 3.875%, but a whopping 1.2% to move to 3.75%, it's clear that this lender's Best-Execution is at least 3.875%.  In some cases, some clients may opt to pay big buydowns if they understand the longer time it will take to breakeven on the extra upfront expense in terms of monthly payment savings from an .125% lower rate. 

Other times, the gaps between rates are fairly close together for several rates near Best-Execution.  This makes the process of deciding that lender's Best-Ex rate much more subjective.  In these cases, we assume scenarios with the best combination of lowest closing costs but not at the expense of monthly interest savings that could be recouped in less than 5 years.  This almost always means a loan with no origination fee.  But when the range of options are similarly viable, we involve the community to get a consensus not only of what they're quoting, but also which options their clients are choosing.  This is combined with the objective measurements taken from lenders, and each lender's best-ex rate goes into calculating the average.

All that to say that this average moved up from 3.92% to 3.98% today.  3.92 rounds down to the closest eighth whereas 3.98 rounds up, thus, the 4.0% Best-Execution today.  But keep in mind that 3.875% is still very much "out there," meaning, deals can be viably structured with 3.875% rates just as easily today as they could have been on Friday, as long as you can afford the increased closing costs.  Also keep in mind that different lenders are continuing to price in the effects of the Tax-Cut-Extension at different times and in different ways.  One large lender priced it in with today's rates and the difference in closing costs would be substantial if you didn't know where they were coming from.  But the tax cut extension calls for a 10bps increase to a fee that lenders have to pay the government on each loan.  That 10bps fee is like 0.1% interest rate increase, almost as much as the .125% increments we just discussed!  So just like moving up and down by .125% increments in rate affected the costs by .4, .5 and even 1.2% of the loan amount, you can see how a difference of 0.1% being priced in overnight could have a drastic effect on closing costs on a particular loan depending on the lender and the initial rate.

Today's BEST-EXECUTION Rates

• 30YR FIXED -  4.0%, 3.875% still a contender
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375%
  
• 5 YEAR ARMS -  2.625-3.25% depending on the lender
  

Ongoing Lock/Float Considerations

• Rates and costs continue to operate near all time best levels
• Current levels have experienced increasing resistance in improving much from here
• There are technical reasons for that as well as fundamental reasons
  
• Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
• While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
• But that will always be the case when rates oper

Mortgage Rates moved higher again today, albeit by a relatively small amount on average.  But averages only tell part of the story.  We're seeing the same phenomenon of increasingly divergent rates between lenders crop up that we saw when the last major shift down in rates was happening, only this time it isn't so much motivated by a currently shifting market as it is by a POTENTIALLY shifting market  The various methodologies for implementing the recently imposed Fannie/Freddie Guaranty Fee Increase are no doubt playing a part as well. 

Whatever the underlying cause might be, what you need to know is that rates have been increasingly different from lender to lender.  Furthermore, some lenders' positioning in the market relative to other lenders has changed drastically in recent weeks.  Some market leaders are now "mid-pack" at best, while some from the mid-pack are now in market-leader territory.  Rate diversity notwithstanding, the recent weakness might be cause for some concern if you'd been floating and waiting.  While there still are a few lenders where 3.75% is a potentially logical a Best-Execution rate for some, at other lenders, 4.0% could make more sense today. The average remains at 3.875% when rounded to the eighth, but the underlying numbers have been steadily on the rise.

All the fuss seems to be centered on the combination of several events in the week ahead, including the FOMC Announcement (Fed Rate Decision and official statement), which is likely the markets focus, in addition to keeping an eye out for potential headlines out of Europe.  There are a few other considerations beyond these that could be prompting a bit of defensiveness in the interest rate environment, including another round of US Treasury Auctions.  What's important here is that markets are heading to central ground, gearing up for a slightly bigger move in one direction or the other.  There's no way to know for sure which direction that will be, and while we wouldn't think that today is the last time we'll ever report on a Best-Execution rate in the high 3's, the small chance that it is, could be enough of a motivation to protect against that eventuality.  In other words, if you didn't lock earlier this week, the market is trying to force your hand.  You either have to cut your losses or be forced to play a risky game next week.  Tough call either way.

Today's BEST-EXECUTION Rates

• 30YR FIXED -  3.875%, 3.75% as close as it's been
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375% / 3.25%
  
• 5 YEAR ARMS -  2.625-3.25% depending on the lender
  

Ongoing Lock/Float Considerations

• Rates and costs continue to operate near all time best levels
• Current levels have experienced increasing resistance in improving much from here
• There are technical reasons for that as well as fundamental reasons
  
• Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
• While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
• But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.

Mortgage Rates worsened at a reasonably brisk pace today when compared with recent relative stability.  Still, the movement remains confined to costs associated with as yet, unchanged Best-Execution Rates.  That means that 3.875% is still the average "best-case-scenario and best bang-for-the-buck" rate among most lenders rounded to the nearest eighth.  3.75% had been increasingly attractive last week, but has all but faded from view after lenders released rates weaker this morning.  Several lenders recalled those rates, raising costs as bond markets suffered.

Over the past few days, we've included the following in our analysis:

Rates are as low as they've ever been.  How long will this continue?  There's no way to know for sure, but we generally advocate a conservative approach with rates at all time lows.  "Conservative" in this sense simply means that history has shown us how quickly record-low rates can disappear.  While we certainly wouldn't rule out the possibility that rates can improve, we've already been experiencing the fact that further gains are hard-fought and take more time than gains seen in the middle of the range. 

If you happened to read that, taken in conjunction with several days of weakness, you may be wondering if these are the days that mark the turning point away from all time low rates.  The great thing about such a concern is this: rates are still at all time lows!  If you're worried that current weakness could mark the turning point, the sacrifice of slightly higher closing costs vs yesterday seems minimal compared to the loss of the opportunity altogether. 

If losing the opportunity doesn't bother you much, just be sure to clearly define an acceptable level of loss from current rates.  Set yourself a "stop," of sorts, by deciding on a rate slightly higher than what you're currently being quoted, at which you'd lock at a loss if the market moves against you.  Locking in such a scenario can prove exceedingly frustrating more often than not as the higher probability eventuality has been for rates to return lower, but this pales in comparison to the potential frustration of rates NOT returning lower.

Today's BEST-EXECUTION Rates

• 30YR FIXED -  3.875%, 3.75% as close as it's been
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375% / 3.25%
  
• 5 YEAR ARMS -  2.625-3.25% depending on the lender
  

Ongoing Lock/Float Considerations

• Rates and costs continue to operate near all time best levels
• Current levels have experienced increasing resistance in improving much from here
• There are technical reasons for that as well as fundamental reasons
  
• Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
• While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
• But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.

Mortgage Rates continue to ebb and flow in the same pattern that has persisted for over a month.  The average Best-Execution interest rate for a 30yr fixed loan has remained at 3.875% during that time and the closing costs associated withtthat rate have been gently rising and falling, with increasing regularity.  We've rarely strung together 3 days in a row with movements in the same direction (i.e. borrowing costs rise very slightly 3 days in a row, while Best-Ex stays at 3.875%), and the actual difference in those costs day over day continues to be fairly minimal.

Those borrowing costs rose very slightly today, a reasonable conclusion to the previous two sessions offering all time low rate/fee combinations.  This means that whereas 3.75% was "as close as it's ever been to sharing equal recognition with 3.875% as a viable choice for Best-Execution," that's no longer the case today, but it should be noted that the buydown schedule (amount of additional closing costs required to move down in rate) at some lenders allows for scenarios with even lower rates to make sense depending on your preferences and qualifications.

If you didn't catch Friday's Article, which went into a bit more detail on how we determine "Best-Execution," it's worth a read.  But the bottom line is really this: regardless of the actual interest rate levels, there's no other way to say the following: rates are as low as they've ever been.  How long will this continue?  There's no way to know for sure, but we generally advocate a conservative approach with rates at all time lows.  "Conservative" in this sense simply means that history has shown us how quickly record-low rates can disappear.  While we certainly wouldn't rule out the possibility that rates can improve, we've already been experiencing the fact that further gains are hard-fought and take more time than gains seen in the middle of the range. 

Whatever your disposition toward locking vs floating, it makes sense to set yourself a "stop," of sorts, by deciding on a rate slightly higher than what you're currently being quoted, at which you'd lock at a loss if the market moves against you.  Locking in such a scenario can prove exceedingly frustrating more often than not as the higher probability eventuality has been for rates to return lower, but this pales in comparison to the potential frustration of rates NOT returning lower.

Today's BEST-EXECUTION Rates

• 30YR FIXED -  3.875%, 3.75% as close as it's been
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375% / 3.25%
  
• 5 YEAR ARMS -  2.625-3.25% depending on the lender
  

Ongoing Lock/Float Considerations

• Rates and costs continue to operate near all time best levels
• Current levels have experienced increasing resistance in improving much from here
• There are technical reasons for that as well as fundamental reasons
  
• Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
• While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
• But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.

After setting new records on Friday, Mortgage Rates are absolutely flat to start the week.  That means that Best-Execution remains most appropriately at 3.875% although 3.75% continues to be as close as it's ever been to getting equal recognition.  Depending on the scenario in question, lower rates are available and in rare cases, could make sense. 

If you didn't catch Friday's Article, which went into a bit more detail on how we determine "Best-Execution," it's worth a read.  But the bottom line is really this: regardless of the actual interest rate levels, there's no other way to say the following: rates today and Friday are as low as they've ever been.  How long will this continue?  There's no way to know for sure, but we generally advocate a conservative approach with rates at all time lows.  "Conservative" in this sense simply means that history has shown us how quickly record-low rates can disappear.  While we certainly wouldn't rule out the possibility that rates can improve, we've already been experiencing the fact that further gains are hard-fought and take more time than gains seen in the middle of the range. 

Whatever your disposition toward locking vs floating, it makes sense to set yourself a "stop," of sorts, by deciding on a rate slightly higher than what you're currently being quoted, at which you'd lock at a loss if the market moves against you.  Locking in such a scenario can prove exceedingly frustrating more often than not as the higher probability eventuality has been for rates to return lower, but this pales in comparison to the potential frustration of rates NOT returning lower.

Today's BEST-EXECUTION Rates

• 30YR FIXED -  3.875%, 3.75% as close as it's been
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375% / 3.25%
  
• 5 YEAR ARMS -  2.625-3.25% depending on the lender
  

Ongoing Lock/Float Considerations

• Rates and costs continue to operate near all time best levels
• Current levels have experienced increasing resistance in improving much from here
• There are technical reasons for that as well as fundamental reasons
  
• Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
• While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
• But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.

How many times will we have the opportunity to write this headline in 2012?  Yet again, Mortgage Rates on average, have broken recently set records for 30yr Fixed Best-Execution rates and moved to new all time lows.  Best-Execution remains most appropriately at 3.875% although 3.75% is as close as it's ever been to getting equal recognition.  Depending on the scenario in question, lower rates are available and in rare cases, could make sense. 

As we note in the rate disclaimer, Best-Ex is the "most efficient combination."  This akin to the colloquialism "most bang for your buck," in the sense that we're looking for the shortest amount of time to recapture any applicable borrowing costs.  In some cases, lenders won't only NOT be charging those costs, but can actually pay a few of the other ones as well.  Either way, we look at the difference in cost between each rate.  

Until recently, that has been clearly at 3.875% with no threat of competition from lower rates, but they are gradually getting closer and closer, constituting less of a "diminishing return" to take a look at paying more in closing costs in exchange for a lower rate.  This is why we say 3.875% is still the best candidate for a Best-Execution rate, but 3.75% is getting close--because the gap in costs between 3.875% and the next few lower rates has not only narrowed, but also become more linear. 

Today set records thanks to Europe, both in terms of the broader economic landscape and specific events today.  Threats of a French credit rating downgrade by S&P flooded the Treasury complex with demand, lower the benchmark rates against which MBS (the "Mortgage-Backed-Securities" that most closely govern mortgage rates) are measured and valued.  When Treasuries rally (move lower in yield, higher in price) significantly, MBS tend to be rallying as well, though usually not as significantly.  Still, it was enough of a rally for MBS, and consequently mortgage rates, to improve.  For those that want to read about it in more detail, here's how we described the phenomenon on the MBS Commentary.

Today's BEST-EXECUTION Rates

• 30YR FIXED -  3.875%, 3.75% as close as it's been
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375% / 3.25%
  
• 5 YEAR ARMS -  2.625-3.25% depending on the lender
  

Ongoing Lock/Float Considerations

• Rates and costs continue to operate near all time best levels
• Current levels have experienced increasing resistance in improving much from here
• There are technical reasons for that as well as fundamental reasons
  
• Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
• While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
• But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.

Mortgage Rates held steady to slightly improved today.  This comes after yesterday marked the first hint of rate drama we've seen in 2012, which was nothing more than a minor increase to borrowing costs.  With each passing day of Best-Execution rates staying glued to 3.875%, we grow more and more weary of the monotony, but couldn't be any happier. 

Yes!  Weariness and monotonous market movements have never been so exciting!  Each of those boring passing days with 3.875% rates is another day where mortgage rates have held steady at all time lows, and another day longer in this record-long streak of record-setting rates.  As has been the case, the only detectable movement continues to be seen in the form of the closing costs associated with prevailing rates.  Sure, there have been some fluctuations at individual lenders as the price of the tax cut extension works its way through the market, but on average, this is by far the longest stretch of time that best execution rates have spent under 4.0%, ever. 

At this point, the shock and awe of "rates in the high 3's" has been replaced by the shock of how long that phenomenon persists.  Perhaps "shock" isn't the ideal word.  Given the market backdrop, we'd expect low rates, but the extent to which they've held steady recently is impressive.  In the longer run, it's possible rates could go even lower, but their recent steadiness reiterates that which we already know and have been observing: an increased resistance/difficulty in moving lower from here.

For what it's worth, the decision to express a level of "surprise" today comes on the heels of what was the most action-packed trading day of the week.  It wasn't much more active than yesterday, but there was more domestic economic data to be sure, and choppier trading in the bond markets of which MBS ("mortgage backed securities" that most directly govern loan pricing) are a part.  The fact that you'd never know any of this was transpiring based on lender's rate sheets is a testament to Mortgage Rates intense predisposition to remain flat these days.

Today's BEST-EXECUTION Rates

• 30YR FIXED -  3.875%, glimpses of 3.75% diminishing due to tax-cut-extension
  
• FHA/VA -3.75%
  
• 15 YEAR FIXED -  3.375%
  
• 5 YEAR ARMS -  2.625-3.25% depending on the lender
  

Ongoing Lock/Float Considerations

• Rates and costs continue to operate near all time best levels
• Current levels have experienced increasing resistance in improving much from here
• There are technical reasons for that as well as fundamental reasons
  
• Lenders tend to get busier when rates are in this "high 3's" level and can throttle their inbound volume by raising rates or costs.
• While we don't necessarily think rates are destined to go higher, given the above facts, there seems to be more risk than reward regarding floating
• But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.