Mortgage rates held steady today, despite a key report from the Labor Department showing stronger-than-expected job creation in February.  Typically, a strong jobs report is bad for rates.  This one likely would have been bad as well, but markets got advance notice from another report earlier in the week.  

Remember Wednesday's ADP data?  It thoroughly trounced the 190k expectation, coming in at 298k.  Given that the ADP data attempts to track/predict the Labor Department's report, rates were able to rise preemptively before this morning's data ever came out.  With the official numbers not quite as stellar as ADP suggested, bond markets (and thus, mortgage rates) were able to hold their ground.

While ground-holding is good, the ground itself could be better.  Rates remain at 2017's highs with the average lender quoting conventional 30yr fixed rates of 4.375% on top tier scenarios.  A few remain at 4.25% and some are back up to 4.5%.

Loan Originator Perspective

Bonds caught a bit of tail wind today, as the NFP jobs report showed solid, but unspectacular job/wage growth.  The bulk of bonds' pricing gains occurred in the afternoon, however, after rate sheets had been issued.  It's probable some lenders will reprice better this PM, just a matter of which ones, and when.  It's far, far too soon to pronounce our rising rate trend over, that will take multiple days of gains.  Unless I see significant pricing improvement this afternoon, I'll float through the weekend, at this point pricing hasn't caught up with this mild rally.  -Ted Rood, Senior Originator

Despite a pretty big beat on the payrolls report, bonds are managing to post some gains ending a long losing streak.   With today being Friday, lenders will be very slow to pass along any gains.   Not so sure we will see much follow through next week with FOMC coming up on Wednesday, but I think I would float over the weekend and evaluate pricing on Monday morning. -Victor Burek, Churchill Mortgage

Today's Best-Execution Rates

  • 30YR FIXED - 4.375%
  • FHA/VA - 4.0-4.25%
  • 15 YEAR FIXED - 3.5-3.625%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • Rates had been trending higher since hitting all-time lows in early July, and exploded higher following the presidential election
  • Some investors are increasingly worried/convinced that the decades-long trend toward lower rates has been permanently reversed, but such a conclusion would require YEARS to truly confirm

  • With the incoming administration's policies driving a large portion of upward rate momentum, mortgage rates will be hard-pressed to return to pre-election levels until well after Trump takes office.  Rates can move for other reasons, but it would take something big and unexpected for rates to get back to pre-election levels. 
  • We'd need to see a sustained push back toward lower rates (something that lasts more than 3 days) before anything less than a cautious, lock-biased approach makes sense for all but the most risk-tolerant borrowers. 
  • As always, please keep in mind that the rates discussed generally refer to what we've termed 'best-execution' (that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also 'bang-for-the-buck.'  Generally speaking, our best-execution rate tends to connote no origination or discount points--though this can vary--and tends to predict Freddie Mac's weekly survey with high accuracy.  It's safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie's once-a-week polling method).