Mortgage Rates hit new all-time lows today.  In most cases, lenders' offerings are just slightly better across the board than they were in late January, the last time we officially noted "new all-time lows," though some lenders are not quite back to their previous best levels.  A much weaker-than-expected reading on a widely followed report on business conditions in the mid-Atlantic region gave rates markets a bit of an early jolt lower.  From there, an absence of additional data gave way to technical momentum, helping rates even lower.

Markets are facing tremendous uncertainty over the eventual outcome of Greek elections in June as well as the fate of the Spanish banking sector.  Today, Spain saw their own version of the "run on banks" that occurred in Greece yesterday, reminding traders that, even if Greece makes it out of this mess still in the Euro-zone, that there are bigger fish to fry.  

All that uncertainty has investors piling into safe-haven assets.  In a global economy where a currency as massive as the Euro is in serious trouble due to problems in one small Euro-zone country, investors are just looking for a safe place to park their assets.  US Treasuries have been one such place and their recent rally benefits other products in that same medicine cabinet, such as MBS (the "mortgage backed securities" that most directly influence rates).

Apart from Europe, there's also the consideration of Fed policy in the US.  Whether or not the Fed extends recent quantitative easing measures or embarks on new ones is a matter of great concern to bond markets.  At the last policy announcement, the door was left open for additional easing as-needed, and yesterday's "minutes" from that policy meeting essentially confirmed that open door.  Markets perceive that "as needed" bit as becoming more and more "needed" if the Fed sees signs in the domestic economy like the one seen this morning's weak data.  So when investors think the Fed is more likely to buy more fixed-income investments, rates stay low or move lower, all other things being equal. 

Any way you account for the causes, the bottom line is that mortgage rates are lower.  We'd probably say that 3.75% is the new Best-Execution for 30yr Fixed loans over the past few days and really cemented that today.  Keep in mind, of course, that while we generally think Europe will continue to weigh on markets, keeping rates fairly contained in this new, low range, that "cement" can always be broken if sufficient force is applied.  We're fond of mentioning the increasing barriers to improvement at current levels.  We don't think rates can't improve, just that it will be slow going, and with risks of periodic bounces back.  

Loan Originator Perspective With Rates At All Time Lows

Alan Craft, Loan Officer at Integrity Home Loan of Central Florida

These are the best rates we have ever seen. No reason not lock and take advantage. Is it possible they could go lower? Yes it is possible, but I feel there is a much better chance of worse than better.

Ted Rood, Senior Mortgage Consultant, Wintrust

The biggest drawback to falling rates (as we've seen for a while now) is that borrowers can be lulled into a false sense of security. It doesn't do a borrower any good to stay at a high rate with the hope of getting a new rate 1/4% better than has ever been available. In the equities market, trying to time stock prices to buy at the absolute lowest price is called "catching a falling knife", and it applies to mortgages as well. If you're at a high rate now, and can profit from a refi today, waiting costs you money since you're continuing to pay a higher rate than necessary. In my experience, catching falling knives is not a fun thing to do!

Mike Owens, Partner with HorizonFinancial, Inc.

I've always been a lock it and play it safe originator, but right now I'm 50/50. Rates just keep edging down and I'm actually going to floating short term just to see what plays out. The lock trigger is ready in case, but floating seems safe for now.

Matt Hodges Loan Officer,  Presidential Mortgage Group

The mortgage market is really intriguing right now. Rates have been in slow decline over several weeks, yet there's a persistent fear of a spike upwards with any positive news. Meanwhile, we keep wondering "Where/when will 3.5% or lower be readily available for clients with 0 points?" Volatility and volume have limited the improvements. For the time being, at 30 days or less to closing, lock bias is firmly in place.

Jason York, Vice President of VA Operations at Prime Mortgage Lending, Inc

With where we currently are, I am locking loans that I would typically continue to float.

Kent Mikkola, Mortgage Consultant ,  M & M Mortgage, LLC #213677

Improving rate environments tend to lull us into a false sense of security and often 1 day can wipe out the gains that were made over several weeks. As they say, "a bird in the hand..."

Jeff Statz Mortgage Advisor,  Network Funding, L.P.

Locking most now...stay vigilant for pricing to hold for FHA 6/11 Streamline changes

Today's BEST-EXECUTION Rates 

• 30YR FIXED -  3.75%
• FHA/VA -3.75%
• 15 YEAR FIXED -  3.125 edging down to 3.00%
• 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
• Rates could easily move higher or lower, but given the nearness to all time lows, there's generally 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.
• (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 the same as our average rates, 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).
  

Mortgage Rates are steady to slightly improved today following as Europe's fiscal woes continue providing downward pressure on US interest rates.  The forces at work keeping rates low were joined today by "minutes" from the most recent FOMC meeting.  All told, several notable lenders are offering their all-time lowest interest rates while others remain close.  

Markets actually got off to a shaky start as far as rates were concerned.  Had it not been for the European headlines and the FOMC Minutes, we'd likely be looking at slightly higher rates today.  Mortgage-backed-securities (aka "MBS," the most direct influence on mortgage rates) and US Treasuries began the day in weaker territory until news that the European Central Bank had ceased it's normal interactions with several Greek banks, and the ECB President essentially wasn't willing to bend over backwards to make sure Greece stays in the Euro-zone.  We discussed the implications of a Greek Euro-zone exit in yesterday's post.  

The ECB-related news helped bond markets bounce back into stronger territory and FOMC Minutes added to that momentum.  Though there were no major surprises out of the Fed, the Minutes indicated that the Fed remained in sort of uncertain territory with respect to further quantitative easing, which thus far, has been a major boon for rates.

Markets were perhaps guarded against the possibility that the Minutes would indicate a shift AWAY from an accommodative stance.  The fact that the minutes did no such thing, combined with the consideration that this meeting took place BEFORE the most recent bout of Euro-drama was enough for markets to infer a slightly economically bearish bias from the Fed, and the Fed combats economic bearishness by keeping rates low.  

For only the 3rd time since early February, the Conventional 30yr Fixed Best-Execution Rate is arguably straddling 3.75% and 3.875%.  Some lenders' rate sheets are structured such that 3.75% is clearly Best-Execution.  More have moved down into that territory, though many remain at 3.875%.  (read more about Best-Execution calculations)

Until and unless mortgage rates actually break into NEW all-time lows (which they are very close to doing), we'll likely keep reiterating that which has already been said:

We see two diametrically opposed forces pushing and pulling on mortgage rates here at these key levels.  The European component is the obvious force pushing rates down, but less obvious is the underlying structure of the Secondary Mortgage Market providing resistance to moving lower.  The latter is what has prevented rates from getting any lower now and in the past.

That said, if the economic outlook remains fairly dim and if European concerns continue to fuel that "flight-to-safety" demand for long enough, the Secondary Mortgage Market CAN slowly evolve to accommodate lower rates.  It remains to be seen whether or not it will actually happen.  Global economic panic is not our favorite justification for thinking rates will move predictably lower.

Investors in the secondary mortgage market have demonstrated that they tend to feel the same way, having clearly avoided a quick move down into uncharted territory with respect to the "buckets" on the secondary mortgage market.  Read more about "buckets" HERE.  Without a more stable motivation for low interest rates, we'd expect ongoing progress in creating a market for even lower rates to continue to be slow and small.  

Today's BEST-EXECUTION Rates 

• 30YR FIXED -  3.75-3.875%
• FHA/VA -3.75%
• 15 YEAR FIXED -  3.125 edging down to 3.00%
• 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
• Rates could easily move higher or lower, but given the nearness to all time lows, there's generally 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.
• (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 the same as our average rates, 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).
  

Mortgage Rates paused their recent trend of moderate improvement today to hold steady near all-time lows.   Despite an abundance of domestic economic data out this morning, rates continue to be indirectly fueled by political and economic turmoil in the Euro-zone.

After failing to form a new government, Greece today announced it would hold new elections.  Investors fear that those left in power will lead Greece to back-out of the austerity pledges required by the EU and IMF for recent bailout monies as well as Greece's membership in the EU.

If Greece stops receiving that money, they're all but guaranteed to officially default (their recent debt-restructuring was already a default by some standards), and also all but guaranteed to be booted out of the European Union.  If those things happen, investors fear a domino effect for the entire Euro-zone, and thus are currently very interested in the relative safety of German and US government debt--a phenomenon sometimes referred to as a "flight-to-safety."

While it's not clear how long European events will keep interest rates low and stable, it is clear that this has been the case, and has resulted in interest rates falling in line with all-time lows.

For only the 2nd day since early February, the Conventional 30yr Fixed Best-Execution Rate is arguably straddling 3.75% and 3.875%.  Some lenders' rate sheets are structured such that 3.75% is clearly Best-Execution, though a majority remain at 3.875%.  But even among those lenders, 3.75% is an increasingly viable quote (read more about Best-Execution calculations)

Until and unless mortgage rates actually break into NEW all-time lows, we'll likely keep reiterating that which has already been said:

We see two diametrically opposed forces pushing and pulling on mortgage rates here at these key levels.  The European component is the obvious force pushing rates down, but less obvious is the underlying structure of the Secondary Mortgage Market providing resistance to moving lower.  The latter is what has prevented rates from getting any lower now and in the past.

That said, if the economic outlook remains fairly dim and if European concerns continue to fuel that "flight-to-safety" demand for long enough, the Secondary Mortgage Market CAN slowly evolve to accommodate lower rates.  It remains to be seen whether or not it will actually happen.  Global economic panic is not our favorite justification for thinking rates will move predictably lower.

Investors in the secondary mortgage market have demonstrated that they tend to feel the same way, having clearly avoided a quick move down into uncharted territory with respect to the "buckets" on the secondary mortgage market.  Read more about "buckets" HERE.  Without a more stable motivation for low interest rates, we'd expect ongoing progress in creating a market for even lower rates to continue to be slow and small.  

Loan Originator Perspective With Rates At All Time Lows

Mike Owens, Partner with HorizonFinancial, Inc.

I always always lock and most of my clients agree it's the save bet. Why play with fire? Rates always rise quicker than they retreat and there is too much upside risk to worry about an1/8 here or an 1/8 there. Rates are lower than any of us have ever seen so why get greedy?

Ted Rood, Senior Mortgage Consultant, Wintrust

The only thing flying high in the land of PIIGS (Portugal, Italy, Ireland, Greece, and Spain) these days is unrest and their bond yields. Biggest issue with domestic mortgages are that lenders may soon clamp down originations as their pipelines swell by raising their rates/pricing. Borrowers who procrastinate on their loans looking for an extra 1/8th% in rate may be rudely surprised when that happens. "Never try to catch a falling knife" is the Wall Street term for this situation. I'm redoing customers at 4.75% on current loans, while others at 6.0% "think about it". Guess thinking is why they're still at 6.0% instead of current 3.75% or so!

Jason Zimmer, Parlay Mortgage & Property

As interest rates continue to remain at all time lows, my advice to all of our borrowers is to lock your loan if you plan on closing within 60 days. Don't look a gift horse in the mouth.

Today's BEST-EXECUTION Rates 

• 30YR FIXED -  3.875% edging down to 3.75%
• FHA/VA -3.75%
• 15 YEAR FIXED -  3.125 edging down to 3.00%
• 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
• Rates could easily move higher or lower, but given the nearness to all time lows, there's generally 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.
• (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 the same as our average rates, 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).
  

Asset Based Lending or ABL, is an option for businesses that are looking to receive capital, recapitalization, recon structuring and buyout financing. Also offered by asset-based lenders is the management of assets -- this is offered to businesses that are paying for operating expenses, buying capital expenditures (like equipment) and funding inventory. Most of the time, the line of credit offered begins around $1 million. Most businesses that  qualify for asset-based lending, are business-to-business. The industries they are in include distribution, wholesale, manufacturing and those that offer services generating commercial accounts receivable invoices. In order to qualify, you’re company will need to make over $3 million annually.