Mortgage rates finally caught a break today.  This is quite a welcome development (indeed, yesterday’s commentary pointed out that no breaks were being caught!), but the magnitude of the improvement left something to be desired.  Still, we’ll take what we can get at the moment.  For most borrowers, today’s improvement will simply decrease the closing costs associated with the rates they were already being quoted.  For conventional 30yr fixed loans, the average lenders remains at 4.0% for top tier borrowers.  A few of the most aggressive lenders (emphasis on few) are at 3.875% while more than a few are up at 4.125%.

Today’s positivity creates a natural question: is this the beginning of a bigger bounce?  We may well have asked the same question late last week after two days of improvement on Thursday and Friday.  The consensus at that time was that we’d need to see more evidence of strength before considering that it was anything other than a correction given the massive momentum heading toward higher rates.  Now today, with the past 3 trading sessions resulting in successive 2015 highs for rates, this one minor bounce back is also clearly not enough to suggest anyone lower their guard or abandon their lock bias.

Unfortunately, there is no way to know which day will be THE day when the bigger bounce begins to happen.  It very well could be today, and betting accordingly would have a big payout, but it would take an extreme level of risk tolerance–not to mention ‘willingness to lose money if you’re wrong’–to gamble on that being the case.  Recent and long-term history suggest that the best course of action is to lock until the tenor of the market has decidedly shifted.