Employment Situation Report was stronger than expected. It’s one of, if not the most significant
pieces of domestic economic data each month.
The stronger result caused bond prices to move lower and interest rates
to move higher, including those of Mortgage-Backed-Securities (“MBS”) which are
the primary driver of Mortgage Rates.
The best 30yr Fixed quotes edged up
another eighth of a percent on average.
In some cases, you might be looking at the same rate quote as yesterday,
but in many cases, it’ll be an eighth higher.
That said, the buy-downs to 3.875%
are still fairly cheap, so the rate is available if it you pay the extra
buy-down costs (assuming that makes sense for your scenario, but run a
break-even analysis with your mortgage professional to be sure.)
- BESTEXECUTION 30YR FIXED – 4.0% most prevalent, some 4.125’s.
- FHA/VA –
still at 3.75% !!
- 15 YEAR FIXED
– 3.5%, but buydowns cheap to 3.375%
- 5 YEAR ARMS – low
to mid 3% range, variations from lender to lender.
Ongoing Guidance: Lean more heavily toward locking when Best-Ex is near
4.0 these days. Optimistic for future gains, but would hate to see 3.875
unexpectedly evaporate on some surprise headline out of Europe or turning point
in economic data. (NOTE: For some
scenarios, this happened today).
New Guidance: Yesterday, we wrote: “if tomorrow’s jobs
data is strong, rates could move higher and might not move back lower until
your refinancing timeline has expired.” Hopefully that’s not what happened to you
today. If it did, or if you were
otherwise floating, now we’re down to the choice of locking at a loss versus
floating over the weekend. Again, it’s
all about risk/reward and even with the move higher in rates today it STILL
probably makes most sense for urgent or constrained scenarios to lock today. But if you’re keen to float, have time to
wait for rates to come back down, and are willing to lock at a loss if they
don’t, we’re not opposed to floating over the weekend as rates still haven’t
moved into the next higher “bucket” of MBS.
In other words, this graphic from last week still applies to current
rates (the graphic has been adjusted to account for the fact that 4.25% loans are “between buckets,” and can either go into a group with the rates seen below or the next higher bucket from 4.25-4.75):