June 5, 2015
Mortgage loan rates pushed into year-long highs recently and we’re monitoring headlines for important developments like the scheduled jobs report that’s due out on Friday with potential to help or hurt mortgage rates depending on both the contents of that report and investor reaction to it.
Yesterday we reported best execution mortgage loan rates for 30-year fixed rate conventional loans having broken the 4.0% barrier after spending a great deal of time earlier this year at sub-four percent rates. Going into the low fours seems like a dramatic move higher, but compared to rates in years past, these numbers are still low…but the upward pressure makes those who have gotten used to seeing those best execution rates below four percent a bit nervous.
There is much anticipation of the jobs report due later today, and it is entirely possible that the added attention could aggravate a move higher if the news is such that investors flinch. Then again, we’ve seen cases where such information, previously hotly anticipated, was ignored completely in favor of other data or breaking news.
Only time will tell what the jobs report actually does or does not do for rates in the short term. Conventional rates did improve slightly on Thursday, but don’t look for dramatic changes in the rates from Wednesday to Thursday.
In the meantime, FHA mortgage loan rates are still holding in their current comfort zone of 3.75% best execution at the time of this writing. With enough gradual upward pressure, FHA mortgage loan rates could break out of this comfort zone and begin drifting toward 4.0%–a place they haven’t been consistently for quite some time.
FHA rates often lag behind their conventional counterparts when it comes to changing up or down–it can take time for FHA mortgage loan rates to catch up. But when they do, we’ve seen FHA rates settle into a new comfort zone. That doesn’t guarantee future performance, but it’s something to watch.
FHA and conventional rates mentioned here are listed as best execution rates and assume ideal conditions such as a well-qualified borrower and the availability of a participating lender. Your experience may vary based on your financial qualifications, FICO scores, etc.
Do you have questions about FHA home loans? Ask us in the comments section.
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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