Mortgage rates rose abruptly today, moving
highest levels since July 9th as financial markets prepare for
tomorrow's important Employment Situation Report. These preparations
refer to several underlying factors including the reaction to this
morning's stronger-than-expected economic data as well as concern that
similarly stronger data tomorrow could lead rates even higher. Today's
move took 30yr Fixed best-execution to the upper edge of 4.5%
with 4.625% very close. Tomorrow is an extraordinarily important day
with the highest prospects for volatility since the last employment
report caused the biggest one-day rise in rates of the past 10 years.
It can go either way, depending on the data (which will be released well
before any lenders release rate sheets for the day).
To be clear, if the data is weak enough, it would likely result in
lower rates, but the range of possibilities is wide, and it's "easier
for markets to play defense" against rising rates than it is to try to
guess when, and by how much the longer-term trend higher will stop.
It's similar to the popular phrase "no one wants to catch the falling
knife." Traders aren't eager to trade rates aggressively lower in a
rising rate environment. Our only big moves lower in rate since early
May have been in response to even bigger moves higher. There continues
to be no organic drive toward lower rates, and that continues to be very scary to anyone hoping to see lower rates any time soon.
Today's Best-Execution Rates
- 30YR FIXED - 4.5% - 4.625%
- FHA/VA - 4.25%
- 15 YEAR FIXED - 3.625%-3.75%
- 5 YEAR ARMS - 3.0-3.25% depending on the lender
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