January 11, 2016
On Friday, mortgage rates moved lower in spite of a scheduled economic data release (Friday’s jobs report) that showed a more robust job market. That news has in the past had the power to negatively affect mortgage loan rates–good economic news often comes out to the detriment of mortgage rates depending on investor reaction to that data.
On Friday rates moved lower due to other economic factors including market woes in China and declining oil prices. Investor behavior in reaction to those factors had more of an influence on Friday than the jobs report. That’s not unusual in the grand scheme of things. Much depends on what factors hold investor attention on a given day. On Friday the jobs report was not (but easily could have been) the main event in terms of influence over mortgage rates.
Friday, 30-year fixed rate conventional mortgage rates edged down to the bottom of the four percent zone, best execution. Further improvement could put 30-year fixed rate mortgages back into the high three percent zone, but we’ll have to wait until markets close on Monday to see whether the downward movement continues.
FHA mortgage rates remain in their long-held best execution comfort zone of 3.75%. It can take FHA mortgage rates longer to break out of such a comfort zone than conventional equivalents, but you’ll also experience more variation among participating FHA lenders than with conventional loan rates, so your experience may vary.
Remember, best execution rates are not available to all borrowers or from all lenders–your access to these rates depends greatly on your financial qualifications.
Among industry professionals, lock/float advice is mixed, but those who favor locking say that one factor in that advice is that the China economic headlines that have helped mortgage loan rates here in the U.S. could change if China’s government steps in to assist the markets there. Conditions in that situation could stop being favorable to mortgage loan rates here depending on investor reaction to the news and it’s always wise to consider this type of factor when choosing to lock or float.
Global economic news can play an important part in domestic mortgage rates–overseas financial woes can make rates move lower, but when those woes stop or an economic rebound begins, the opposite is also possible. The economic headlines of today that push rates in one direction could easily shift the next day to push rates in a different direction–ask the advice of your loan officer before choosing to lock or float this week and make the most informed decision you can.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
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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