Mortgage rates moved slightly lower today after hitting the highest levels in more than 4 months yesterday.  There were no significant economic events providing guidance today.  This actually makes the strength more meaningful as the absence of big-ticket events left bond markets to their own devices.  In that sense, the rally was more of a conscious choice.

Rate quotes fell back in line with those seen on Monday.  Most borrowers will see the changes in the form of closing costs as the move wasn’t big enough to affect rates themselves.  4.25% remains to most prevalently quoted conforming 30yr fixed rate for top tier scenarios.

This week ends on a bittersweet note.  On one hand, Friday’s loan costs improved at the best pace of the entire month.  On the other hand, not only was it a small improvement by historical standards, it also leaves us in line with recent highs.  The bigger question is whether this is a turning point that marks the end of an abrupt September market movement, or merely the eye of the storm.  We’ve seen some events in markets over the past two days that allow for a bit of cautious optimism, but in the current environment, it’s important to reevaluate that optimism every day.  Anyone who holds off on locking a rate should have a limit set overhead as to how much rates would have to rise before they’d cut their losses and lock.