Mortgage rates took the day to do just a little bit more of what they've been doing in fairly grand fashion for the past week: MOVE LOWER!  When the good times started in earnest (after last week's Fed Announcement), rates were already in line with their lowest levels in more than a year.  As of today, they're another quarter or a percentage point (0.25%) lower.  In other words, if you'd been looking at a quote of 4.375% last Tuesday, you'd likely be seeing 4.125% today.

Whether or not that's the conventional 30yr fixed quote you're seeing depends on a variety of factors.  But certainly, for anyone with more than 20% equity and strong credit/income, 4.125% is a given and 4.0% is increasingly available. 

Seeing 4.0% means that a few of the most aggressive lenders are going to be offering 3.875% on truly perfect scenarios, but such quotes aren't widespread enough to consider as being anywhere near "the going rate." And while that certainly means "the high 3's" are in sight for mortgage rates, don't expect that move to happen nearly as quickly as the move down to 4.125%.  The reason is complicated to explain and understand, but it has to do with the structure of the underlying market for mortgage-backed bonds, and a sort of arbitrage-based advantage that currently exists between 4.25% and 4.125%. 

To make a long story short, it doesn't cost the average lender any more to give you 4.125% today compared to 4.25%.  This is an uncommon imbalance, and it definitely doesn't apply to the next few steps lower (4.0 or 3.875%).