December 7, 2018
Mortgage rates held on to their recent improvements today after the important Employment Situation (the big "jobs report") showed November job creation was lower than expected. In general, weaker job creation is good for interest rates because it speaks to slower economic growth and inflation (both of which are enemies of rates). This report was particularly important because a strong result would have cast doubt on several speeches from members of the Federal Reserve. Those speeches have warned about slower economic growth in 2019 and the potential for fewer rate hikes than previously anticipated.
There were no clear winners or losers at first--probably because job creation is still historically solid. Additionally, the unemployment rate remained ultra low, and wage growth remained above 3.0% on an annual basis. Markets were indecisive at first, but stocks and bond yields eventually began to move lower. Multiple mortgage lenders offered small improvements on rate sheets in the afternoon, after the bond market gained enough ground. Today's mortgage rates are the lowest in months and current trends are about as strong as they've been in more than a year.
Loan Originator Perspective
Bond markets had scant reaction to today's "less than robust" NFP report. That wasn't surprising, given this week's prior gains, but could indicate it's unlikely we drop much further. Stocks' sell-off continued, and have certainly contributed to bonds' rally. Borrowers closing within 30 days may want to pull the trigger here, but I'm not opposed to floating loans closing over 30 days out. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 4.75%
- FHA/VA - 4.25%
- 15 YEAR FIXED - 4.25%
- 5 YEAR ARMS - 4.375%-4.875% depending on the lender
Ongoing Lock/Float Considerations
- Headwinds that had plagued rates for most of the past 2 years are slowly dying down. The rising rate environment could flare up again, and some headwinds remain in effect, but the broader tone has taken a more optimistic shift.
- Highest rates in more than 7 years in Oct/Nov. Lowest rates in more than 2 months as of early December
- This is a bit of a crossroads. We may look back at Oct/Nov and see a long-term ceiling, or we may look back at early December and see a temporary correction before more pain. Either way, it's one of the more hopeful positions we've been in for several years.
- 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.