Learn. Share. Connect. (52,349 Members)  - Join

Site Tools

Join Now or Sign In
for Full Access to All Features
Mortgage Rates
30 Yr FRM 4.83% -0.08%
15 Yr FRM 4.32% -0.04%
1 Yr ARM 4.35% -0.11%
5/1 Yr ARM 4.25% -0.04%
30 YR Tres 4.28% 0.00%
Fed Prime 3.25% 0.00%

Recent Polls

Do you expect the home buyer tax credit extension to contribute to a noticeable pick up in loan production?

Created By: Adam Quinones
  • Yes, I anticipate an increase in activity (26.4%)
  • Only a modest upturn in production (44.3%)
  • Nope. 2009 demand stole from 2010 demand (29.3%)
Receive Free Email Alerts
Stay up to date on breaking news and blog posts with our free News Alert Service
Refinance Rates
Purchase Rates
Refinance Rates,
   Product:                      Today       Last Week
Compare rates in your area:
Refinance rates provided by 
Mortgage Rates
Refinance Rates
Purchase Rates
Purchase Rates,
   Product:                      Today       Last Week
Compare rates in your area:
Refinance rates provided by 
Mortgage Rates

Mortgage Rates Higher After Jobs Data

by Victor Burek -
 Email Page (New!)   |     Print   |     Bookmark

Mortgage backed securities had a calm day yesterday, never straying far from opening levels, posting inconsequential gains by close.   You could say the market was in "wait and see" mode ahead of the Employment Situation report--one of the most important monthly economic indicators released each month.  But sometimes the data with the most potential to move markets...doesn't move them at all.

That WAS the case in the MBS market this morning.  The report showed mixed data, with LOWER than expected job losses but HIGHER than expected unemployment (full story on MND...).  Though stocks were slightly higher and treasuries much lower, MBS walked their own path for most of the morning.  In fact, whereas the 10 year treasury yield was up 6 basis points this AM, MBS yields were only fractionally higher.  Even though MBS are still performing much better than treasuries today, accelerating losses put the yield increases closer to .05% at the moment. 

Keep in mind, that changes in MBS yields are occurring at the investor level.  Though MBS yields, given enough time, will almost exactly match up with mortgage rates, it's up to individual lenders to decide how quickly and by how much actual rate sheets are changed.  The implied change in today's mortgage rates is 0.05% higher right now.  In the spirit of "taking it away faster than giving it back," lenders may raise rates more than this.  I've been fairly enthusiastic about locking this week, so hopefully you're already locked and not even reading this!  But if not, and if you are NOT seeing higher rates this AM, locking should be a strong consideration, as you are likely to see higher rates by days end depending on your lender.

The markets are closed Monday in observance of Labor day.  It is very common for traders to move money to the sidelines prior to a 3 day weekend.  To oversimplify a complicated dynamic, more often than not this causes some weakness in MBS prices on days like today, regardless of data.  So again, that suggests that any rates you might see today that are the same or very close to yesterday's deserve careful consideration as they are running the risk of getting worse later today and potentially Monday as well.

Reports from fellow mortgage professionals indicate that rates today are higher than what we had yesterday morning.  This places the par 30 year conventional rate mortgage in the 4.875% to 5.125% range for the best qualified consumers.  If you are closing within the next 30 days, I would suggest that you get your rate locked early this morning, especially if your lender has not yet repriced for the worse--likely a common occurrence today.

My next post will come to you on Tuesday.  I hope everyone has a wonderful Labor Day weekend.


Filed under:

Comments

Join Now or Login to Post Comments

on
Ok, I know its friday but just wanted to throw this out there for opinions. I'm doing a refi on my primary residence that I will stay in for likely 10+ years. I have the following options today 4.875 30year 3.75 5/1 arm I never had considered an arm and I know we are at "historic" lows in rate (except for early this year) but the savings at least for 5 years would be substantial - then see where we are then. Thoughts?
on
Cary, nothing wrong with the 5/1 arm. over 5 years the savings would be dramatic. In addition, over the next 5 years many things might change in your life that results in your time frame in this house being much less than 10 years. You might want to strongly consider the ARM.
on
Personally, I would take the fixed rate. That's a nice low rate, and you don't have the worry that your bottom line might increase dramatically in 5 years. You plan on being in the house more than 10 years... do you want to risk your mortgage increasing 20% or 40% when the loan flips over?
on
find out what the caps are over the adjustment period. measure your savings with you possible losses during your adjustment period. this will help you make a more educated decision.