Mortgage rates moved convincingly lower today following weaker-than-expected employment data from the Labor Department.  The big "jobs report" showed only 138k new nonfarm payrolls (the report's headline job creation metric) in May, and a negatively revised 174k in April (down from 211k).  March was revised lower as well, painting a suddenly gloomier picture relative to the strong, stable job growth reported since roughly 2011.  

It's not that the current numbers are worse than they were during some of the rough patches over the last 6 years, just that we're not seeing as much resilience.  Payroll growth has now come in under 250k for 10 straight months--something that hasn't happened since 2012 (but at least in 2012, the broader trend was positive as opposed to potentially reversing).

When job growth trends are "potentially reversing" for the worse, interest rates win.  It's too soon to know if this is merely the beginning of a bigger move toward lower rates, but we'll know a lot more about that next week.

Loan Originator Perspective

Had a nice move in rates after the monthly jobs report missed expectations. If we can stay here or mover lower on the 10 year treasury we should see even more price improvements. But with that said the current 2.15% on the 10 year has been a tough nut to crack in 2017. Time will tell. If you’re closing soon we’re at the best levels in quite a while so locking isn’t a terrible idea. If you’re not closing for 30+ days, let’s see what happens next week.  -Jeff Anderson, Loan Officer, Salem Five Mortgage, LLC

Bonds and rates benefited from today's sub-par NFP jobs report, and my pricing showed moderate improvement.  Our slow trend to lower rates may be accelerating, although we're still a long ways from last summer's.  While floating inherently involves risk, I see more upside than downside to short term floating at the moment.  Today's MBS improvements aren't entirely reflected on current rate sheets, it takes a day or so for that to happen.  As always, only float if you won't lose sleep (or your loan) over it.  -Ted Rood, Senior Originator

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.