Mortgage Rates Unchanged To Slightly Higher Ahead Of Important Jobs Report

By: Matthew Graham •

Mortgage Rates were modestly higher in most cases today, although some lenders were actually improved from Tuesday's offerings.  For most lenders and most scenarios, there's no change to Tuesday's quoted rates with the only differences being detectable in the form of higher borrower costs (in most cases).  Conventional 30yr Fixed Best-Execution remains well into 3.625% territory and approaching 3.5% at several of the most aggressively-priced lenders. 

(Read More:What is A Best-Execution Mortgage Rate?)

On Tuesday, we noted that rates were at all time lows and that floating was risky ahead of the the mid-week Holiday followed quickly by the important Employment Situation Report on Friday, but put that in perspective by saying that the default expectation for rates is "low and steady" until/unless they do something to break that trend.  The low and steady default continues to be the case today as the difference vs Tuesday's rates is negligible.  

 See Rates from Lenders in Your Area

The more important decision is today, however, in that tomorrow's Jobs report has more market-moving potential than all of today's data.  It is, has been, and will continue to be "the biggie" in terms of domestic economic data.  There's no way to know what effect it will have on rates ahead of time.  All we can safely say is that events like this have high "potential energy."  In other words, some events can be safely tuned out with the knowledge that they won't have enough of an impact on rates to matter.  

The same can't be said for The Employment Situation report (also referred to as 'NFP' due to it's primary component: Non-Farm Payrolls).  This isn't a guarantee that it will send markets in one direction or another, but just like fans at the ballpark pay attention when a known slugger comes up to bat, so too do mortgage rate watchers move a little closer to the edges of their seats when NFP is on-deck.  Do keep in ind though, with respect to this "watching and waiting" analogy, IF it's much better than expected, rates stand a good chance to be noticeably higher than they are today, and in most cases before you'd have a chance to lock. 

Long Term Guidance: We'd continue to advocate against trying to "get ahead" of current market movements due to the high degree of uncertainty.  While it's a reasonably safe assumption that European concerns will generally help rates stay lower than they otherwise would be, that "otherwise would be" part is very much a moving target.  Best bet is to focus on the fact that rates are at their all time lows, and can change quickly based on events that aren't "scheduled" or able to be forecast.  Risk vs reward for floating vs locking looks a bit larger than we'd like, but not out of the question for those who understand the risks and have an exit strategy if things don't go their way.

Loan Originator Perspectives

Ted Rood, Senior Mortgage Consultant, Wintrust Mortgage

Rates continue to improve despite better than expected initial jobs #'s. Lenders continue to see turn times and loan volume increase. If you're wanting to pursue a loan, best get while the getting is good!

Steve Chizmadia, Mortgage Consultant, American Capital Home Loans

The jobs report is, and always has been a market mover for mortgage backed securities. If you are in a position where you are within 30 days of closing with rates at or near all time lows and lenders reluctant to improve pricing much further I would lock in and not look back.

Jeff Statz, Network Funding, L.P.

If your lender got a reprice for better today, I'd consider locking. A lock today is probably close to the best rate and pricing you've ever seen.  If floating, judiciously watch for movement from tomorrow's Non-farm Payrolls report.

Today's BEST-EXECUTION Rates 

  • 30YR FIXED -  3.625%
  • FHA/VA -3.5% - 3.75%
  • 15 YEAR FIXED -  3.00%
  • 5 YEAR ARMS -  2.625-3. 25% depending on the lender

Ongoing Lock/Float Considerations 

  • Rates and costs continue to operate near all time best levels
  • Current levels have experienced increasing resistance in improving much from here
  • Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
  • But that will always be the case when rates operate near all-time levels, and as 2011 showed us, it doesn't always mean they're done improving.
  • (As always, please keep in mind that our talk of Best-Execution always pertains to a completely ideal scenario.  There can be all sorts of reasons that your quoted rate would not be the same as our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).