Mortgages Rates moved convincingly lower today following a weaker-than-expected Jobs report.  Combined with yesterday's gains, most lenders are at their best levels of the week.  Some are close to their best levels of the month, but rate sheet offerings are more stratified than normal.  The Best-Execution Conventional 30yr Fixed Rate is now in a transitional territory between 3.875% and 4.0% with the latter still constituting the best bang for the buck.

Whereas many lenders would have had issues with no closing cost loans (assuming a flawless scenario) at 4.0% earlier this week, that would now be the exception rather than the rule.  A few of the more aggressively priced lenders are much closer to a no-closing-cost scenario at 3.875%.  As always, keep in mind that we track best-execution rates based on an ideal scenario in order to have a static frame of reference to capture the day to day MOVEMENT of interest rates.  

(read more about Best-Execution calculations).  

The 800-lb gorilla in the room finally had its say today...  The all-important Employment Situation Report showed a MUCH-weaker-than expected labor market with only 120k new jobs created versus expectations just over 200k.  That's an absolutely huge miss, especially considering the other various employment metrics in late March seemingly indicating improvement over February.  

Generally speaking, news that's negative for the economy is good for mortgage rates.  If job growth is strong, it hearkens further economic improvements, and a stronger economy can support higher interest rates.  But reports like today's cast some doubt as to the pace of the recovery that some would suggest has been overstated due to the exceptionally warm winter.  

When that fear and doubt creep back into the market--fear that the economy isn't really growing as fast as thought--investors may seek the stability and safety of Fixed-Income investments such as Treasuries and MBS, which are the "Mortgage-Backed-Securities" that most directly influence lenders' rate sheet offerings.  

From last Friday: "Betting on lower rates is to hope that the data turns out to be economically worse-than-expected or that a news headline rattles market confidence and drives better demand for fixed income investments like MBS.  Ultimately, Friday's Jobs Report is the "biggie," and will serve to either accelerate or undo some of the progress or deterioration created in the first four days of the week."

Long story short, if you rolled the dice through today's Jobs report, you won.  

There's some house-cleaning to be done in the mortgage world early next week as investors settle and deliver the current batch of MBS and move on to filling the bucks for the next round.  That process can cause unexpected rate sheet behavior in either direction.  There are also several important Treasury auctions.  These will help to take the market's temperature in a way, after some major fluctuations in interest rates over the past 3 weeks.  

That process will be aided by the fact that many market participants who were out of the office for today's Good Friday holiday will return and add to next week's trading volume.  Today's was very light for a Jobs Report day, and officially ended early due to the holiday.  That's either scary or promising depending on how they trade when they return.  Even so, today puts bond markets in a much better position to fight for lower or at least more stable interest rate offerings. 

Today's BEST-EXECUTION Rates (updated!)

  • 30YR FIXED -  4.0%, with 3.875% creeping back
  • FHA/VA -3.75%
  • 15 YEAR FIXED -  3.25%-3.375%
  • 5 YEAR ARMS -  2.625-3.25% depending on the lender

Ongoing Lock/Float Considerations (updated!)

  • Rates and costs continue to operate near all time best levels
  • We've recently spent time further away from the very best levels of the past few months having broken away from a long, stable trend.
  • That led us to expect greater volatility, and indeed we got it!
  • But now that volatility MIGHT be depositing us back at the edge of the old, stable range.  Whether it lets us back in or not, is another story.
  • Rates could easily move higher or lower, but given the nearness to all time lows, there's generally more risk than reward regarding floating
  • (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).