Mortgage rates are officially holding their breath ahead of Thursday's FOMC Announcement.  It's not mortgages, specifically, but the entire bond market.  In fact, a Fed rate hike doesn't necessarily have to be bad for mortgage rates or longer-term Treasury yields.  It's the uncertainty that's causing the paralysis (or breath-holding, as the case may be).  Financial markets will definitely become more active after Thursday's Fed decision.  Simply put, most investors have a plan A and a plan B at the very least--one for a Fed hike, the other for 'no hike.'  They don't want to get too far away from either plan until they know what the Fed actually does. 

This has been going on for quite some time and it's the biggest driving force behind the absence of volatility in mortgage rates.  To reiterate, it's not that a Fed hike necessarily means anything for mortgage rates--simply that the entire market is really on hold while we wait for the Fed.  In terms of conventional 30yr fixed rate quotes on top tier scenarios, that means an ongoing range of 3.875% to 4.0%, with the latter being the most prevalent.

It's also good to consider that there is no guarantee that this paralysis will continue right up to Thursday afternoon itself.  The significance of economic data begins increasing tomorrow, and investors could take cues from results that were much stronger or weaker than expected.  For short term scenarios, the risk/reward for locking and floating remain minimal.  That means there's likely less to gain or lose between now and Thursday, but be sure to lock before then if you're not interested in a very high-stakes roll of the dice.