October 6, 2017
Mortgage rates moved higher today, following a much weaker-than-expected jobs report. These are two things that essentially never go together. What made this time so different?
The paradox was made possible by the recent Hurricanes wreaking havoc on the jobs counts for the month of September. Normally, weaker jobs data (i.e. lower counts of "payrolls") signal economic weakness. A weaker economy generally can't support rates and stock prices as well as a stronger economy. Thus, weak jobs data usually pushes rates lower.
Because of the weather, financial markets were able to forgive the payroll counts and from there, the other data included in the report actually painted a fairly bright economic picture. With that, rates rose quickly in the morning, bringing the average lender to the highest levels since early August.
Bond markets are closed on Monday in observance of Columbus Day. This means mortgage lenders won't have access to updated rate sheets until Tuesday.
Loan Originator Perspective
Today's NFP jobs' report was (not surprisingly) completely disregarded by bond markets due to Hurricanes' Ira and Harvey's impacts. Bonds sold off moderately before finding some support amid rumors of looming North Korean nuclear tests. When bonds lose ground amid net job losses and potential nuclear war, it's obvious the trend favors higher rates. I'm still locking loans early. -Ted Rood, Senior Originator
Today's Most Prevalent Rates
- 30YR FIXED - 3.875-4.0%
- FHA/VA - 3.5%
- 15 YEAR FIXED - 3.25%
- 5 YEAR ARMS - 2.75 - 3.25% depending on the lender
Ongoing Lock/Float Considerations
- 2017 has proven to be a relatively good year for mortgage rates despite widespread expectations for a stronger push higher after the presidential election in late 2016. Most of the rate spike was done by the end of 2016 and we've generally moved sideways to lower since then
- The biggest question is whether or not this counter-intuitive trend has an expiration date. Rates haven't been immune from brief corrections back toward higher levels, and each correction causes concern that the good times are over.
- Despite those concerns, we've seen rates make new lows in April, June, and September. Although rates have been rising since early September, they'd have to move even higher before we'd consider a change in the bigger picture theme.
- All of the above having been said, past precedent suggests we're due for a much bigger dose of volatility some time soon.
- 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.