November 25th Best Mortgage Interest Rates and Lock Recommendation

Here is today's look at best mortgage rates, (which do not include discount points, origination points, or loan level risk based price adjustments) provided by Mortgage News Daily, Freddie Mac, and other sources. Note that Freddie Mac's AVERAGE rates are typically higher than BEST rates, because average rates include surcharges for risks associated with property types, down payments, and credit scores. To be eligible for BEST rates, borrowers need spotless credit (740 score or better), a sizable down payment (20-25%) or equity amount, and stable, adequate, and documentable income. In addition, the property must be located in a healthy (not declining) market and must be conventionally built.

*** LOCK ALERT *** MORTGAGE RATES LOWER *** LOCK NOW *** LOCK NOW *** LOCK NOW *** Mortgage interest rates are as good as they've ever been. Rates improve in the wake of a successful Treasury auction. Ample downside, little upside in floating.

Today's stock markets are slightly higher, and mixed economic data does point slightly to future rate increases.

1. October's Durable Goods Orders showed a 0.6% decline in new orders for big-ticket items. This report isn't considered important enough to drive MBS pricing much, but today's news can be considered favorable for mortgage interest rates.

2. October's Personal Income and Outlays data revealed a 0.7% increase in spending--which exceeded forecasts. Consumers spent more than expected, increasing the possibility of economic growth. This is bad news for bonds and mortgage rates because economic improvement leads to inflation concerns and makes MBS less attractive to investors.

3. The revised November University of Michigan Index of Consumer Sentiment came in at 67.4--a bit higher than expected, indicating that consumers are more confident than previously thought. That can be considered bad news for bonds and MBS.

4. Finally, New Home Sales data could likely drive rates higher today, especially if combined with a weak Treasury auction--this gets under way at 1:00 EST. October's Single-Family Home Sales increased 6.2%�� (an annual rate of 430,000 sales). This was a big jump--much better than expected and a whopping 25,000 units more than the 405,000 pace indicated in September's report.

Good news for home sellers: current data suggests that the new home supply will last for 6.7 months....the since December 2006. The better than expected data drove 10-yr yields up to 3.33%...and pulled mortgage-backed securities (MBS) prices lower, which has the effect of increasing mortgage interest rates.

Rate priced for better in the wake of a successful 7-year Treasury auction. But lenders could find themselves pricing more conservatively before the holiday break.�� If closing in the next 60�� days I would LOCK my rate. Otherwise, I would FLOAT my rate. This is only an opinion--what I would do if I were closing a mortgage at this time. Your decision may depend on other factors such as the strength of your loan approval and your tolerance for risk, and must be made with those in mind.

Liz Freeman has more than a decade of mortgage lending experience. She writes about mortgage and finance issues and is a regular contributor to Mortgage News Daily.