Mortgage rates gave back yesterday's gains this morning following a stronger-than-expected employment report from ADP.  While this is not the week's biggest jobs report, investors view it as one of several early indicators of the official Employment Situation (the big jobs report that comes out tomorrow morning).   In general, stronger economic data (i.e. more job growth) tends to push rates higher and vice versa.

In the bigger picture, today's move higher in rates will scarcely be detectable for most borrowers.  In nearly every case, today's rate quote would be the same as yesterday's with the possible exception of slightly higher upfront costs today.  When it comes to "note rates" (the actual interest rate applied to your mortgage balance, without regard for the upfront costs), we're still sideways near the best levels of the year.  

Does today's reaction to the ADP data suggest markets are prepared to react to tomorrow's bigger jobs report?  Absolutely!  Markets are always READY to react to the Employment Situation, but the numbers will have to fall far from the median forecast.  Stronger numbers suggest higher rates, but a big miss could be enough for rates to challenge recent lows.  Either way, tomorrow is the riskiest day of the week, for better or worse.

Loan Originator Perspective

Despite some bullish economic data, bonds are holding up relatively well.  We do get non farm payrolls tomorrow which is the most important data point each month.  A better than expected number, will pressure bonds higher but need to keep an eye on the hourly pay part.  I think investors are more concerned about wages than the number of jobs created.   Always risky to float through the payrolls report so my clients are favoring locking today. -Victor Burek, Churchill Mortgage

Today's Most Prevalent Rates

  • 30YR FIXED - 4.00%
  • FHA/VA - 3.75% 
  • 15 YEAR FIXED - 3.25%
  • 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

  • Investors were relatively convinced that the decades-long trend toward lower rates had been permanently reversed after Trump became president, but such a conclusion would require YEARS to truly confirm

  • Instead of continuing higher in 2017, rates instead formed a narrow, sideways range, and held inside until April.  Investor perceptions are shifting such that fiscal reforms and other policy developments will need to live up to expectations in order to push rates higher.  Geopolitical risks would also need to avoid flaring up (more than they already have)
  • For the first time since the election, we're in a rate environment where you wouldn't be crazy not to lock at every little opportunity/improvement.  Until/unless it's broken, the highest rates of early-2017 mark the ceiling, and we're now waiting to see how much lower we can go from here.
  • Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders.  The rates generally assume little-to-no origination or discount except as noted when applicable.  Rates appearing on this page are "effective rates" that take day-to-day changes in upfront costs into consideration.