August 8, 2016
Mortgage loan interest rates pushed higher on Friday after a stronger-than-expected jobs report. The Employment Situation Report came out on Friday with good news for the economy-approximately a quarter million new jobs reported as opposed to the approximately 180 million expected to be reported.
This resulted in what can be confusing for some who are new to market watching; good news for the economy equalling bad news for mortgage loan rates. It’s something that often happens, and it’s something you come to expect after some experience watching mortgage loan interest rates and the factors that can affect them.
30-year fixed rate conventional mortgages closed out Friday reported at a range between 3.375 and 3.5% best execution. Friday’s move higher could reflect in a borrower’s closing costs rather than the actual rate itself. FHA mortgage loan rates are still holding in a best execution 3.25%. FHA rates tend to vary more among participating lenders, so you may find that this best execution rate isn’t offered by all financial institutions offering FHA rates.
“Best execution” rates assume extremely well-qualified borrowers. The rates you see quoted here are not available from all lenders or to all borrowers. Your FICO scores and other financial data will play a big part in determining your access to such rates; your experience may vary.
Looking at the week ahead, there are several scheduled economic data releases including Friday’s Retail Sales report which, depending on investor reaction, does have the potential to push rates in the short term. There are Treasury auctions scheduled from Tuesday to Thursday, and investor reaction to these auctions also have the power to move rates short term.
Some market watchers feel that this week could be significant in terms of whether we’re heading into an upward or downward trend. Watching these events is crucial if you are floating or considering floating.
Floating is never risk-free, but depending on how much conditions change this week, that risk could be elevated or diminished depending on circumstances. If you aren’t sure whether to lock or float and your closing date is coming soon, it’s a good idea to have a conversation with your lender for some advice on how to proceed.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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