Lock and Load

"Come on, lock up, baby, lock up."
--Maverick (Top Gun)

I inked a contract to purchase a new house this past week. We're scheduled to close in early May. I'm doing a 15 yr fixed mortgage and my paperwork is done. However, I've yet to lock in my interest rate. Currently, price is 4 3/4% with a 45 day lock. If I could wait another week or so, a 30 day lock stands at 4 5/8%.

Mortgage rates are near generational lows, but the Fed is acting aggressively to buy rates lower in attempt to juice a housing-led economic recovery. There is no guarantee that rates will go lower because the Fed must print money in order to buy bonds (a.k.a. 'monetizing debt'). This is clearly inflationary and at some point rates are likely to reverse higher. Already, long bond rates have retraced about 50% of the move after the Fed's monetization announcement a couple weeks ago.

So, do I play it safe and lock in a quite respectable 4.75 on Monday, or do I roll the dice a bit longer hoping that the Fed's near term firepower shaves another eighth or quarter point in the next week or so?

I could always short some govies in the interim as a hedge...