Bonds are currently pointing to slightly higher rates, yet the average lender is unchanged compared to yesterday’s latest levels.  This has to do with today’s trading momentum in bonds.  They pointed to higher rates in the early morning, but recovered just before mortgage lenders sent out rate sheets.  As such, lenders were perhaps a bit more conservative than they might have been if markets were simply unchanged versus yesterday.  Several hours later, bond markets began slipping, again pointing to slightly higher rates.  A small minority of lenders may adjust rates between now and the end of business today, but not enough to push the average off course.

This discrepancy between what markets are saying and what lenders are offering is useful.  It lets us know that–all things being equal–rates will be slightly higher tomorrow if bond markets don’t budge from here.  The catch is that they usually do budge, but the point is that the imbalance tips the scales just slightly in favor of locking.  And the scales were already looking a bit tippy.

With rates near recent lows and some apparent resistance to further improvement, locking is a more compelling option than it had been a few weeks ago.  What about floating?  There’s a place for that strategy as well, as long as you understand the risk that markets could move against you and you’re prepared to lock at a higher rate if markets move too much.