Mortgage rates moved only moderately higher today after the Employment Situation report came out much stronger than expected.  The all-important jobs data showed payroll growth of 242k in February compared to a median forecast of 190k.  The unemployment rate held steady at 4.9 percent despite more people joining or re-entering the labor force.  

Economic data is one of the most important cues for the bond markets that underlie mortgage rates.  Stronger data tends to put upward pressure on rates and today's was no exception.  That said, today's movement wasn't especially bigger than any other day spent moving higher over the past week.  Indeed, rates were likely able to avoid a sharper move for precisely that reason: they've been consistently moving higher. 

The most prevalent conventional 30yr fixed rate quote is now back to 3.75% after spending more than a month at 3.625%.  One eighth of one percent might not seem like much, but this is a jump that rates have only made a few times ever.  It's a line in the sand, of sorts, and crossing it has typically signaled more pain ahead.  There's still some time for rates to fight back, but they'd need to mount a convincing defense right away.  Even if they manage to do that next week, it's not the sort of thing that's safe to bank on.

Loan Originator Perspective

"What was a pretty strong jobs report this morning is instilling some pain with mortgage rates today. The only solace in the report was a weaker wage component otherwise I think we would be much worse. In fact, I'm surprised rates are not much worse anyway. So, my opinion, is that your strong bias should be towards locking in your rate sooner rather than later as I have a feeling we may be in for more pain next week once the market fully digests some of the strong components of this jobs report." -Hugh W. Page, Mortgage Banker, SeacoastBank

"Not much to say today other than this is disappointing for anyone floating. Recent economic data seems to indicate that our economy is doing better than the popular opinion of January and February would have had us believe. If this theory persists floating will prove to be a dangerous game. " -Jason B. Anker, Vice President- Loan Officer at Salem Five

"Rate sheets got beat up this morning after a much better than expected payrolls report. The damage was done before lenders issued rates and they worsened pricing accordingly. Since that time, bonds have managed to regain some of the losses but lenders will be slow to pass along any improvements as this is a Friday. At this point, if you floated into the jobs report, I would float to Monday and see how rate sheets look." -Victor Burek, Churchill Mortgage

"Bonds continued their recent weakness today, after the NFP February jobs report exceeded projections. The "trend is our friend until it isn't" mantra is officially defunct, at least for now. Until we get some dour, substantial economic news, looks like 2016's rate rally is in the rear view mirror. Float with caution, if at all." -Ted Rood, Senior Originator

Today's Best-Execution Rates

• 30YR FIXED - 3.75%
  
• FHA/VA - 3.25-3.5%
  
• 15 YEAR FIXED - 3.00
  
• 5 YEAR ARMS -  2.75 - 3.25% depending on the lender

Ongoing Lock/Float Considerations

• The Fed finally hiked on December 16th, causing fears of rising rates in 2016.

• But  global financial markets came into the new year in distress.  Now markets aren't even convinced that we'll see another Fed rate hike in 2016.  Major stock indices plummeted around the world, and investors sought shelter in the bond market.  When investor demand for bonds increases, rates fall.
  
  
• We were left with much lower mortgage rates despite the Fed having just begun its hiking cycle.  This paradoxical trend can continue as long as global market turmoil fuels a demand for safer haven investments.  A big bounce in oil/stock prices could mean trouble for rates--at least temporarily.
   
• As of March 1st, stock markets look like they're at least attempting to get back toward higher levels.  Mortgage rates have been pressured higher accordingly.  While we're well off the lows seen in early February, we're still in very low territory historically--low enough that it wouldn't make sense to second-guess a decision to lock, even though there's still a possibility that the longer-term trend toward lower rates could continue.
   
• As always, please keep in mind that the rates discussed generally refer to what we've termed 'best-execution' (that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also 'bang-for-the-buck.'  Generally speaking, our best-execution rate tends to connote no origination or discount points--though this can vary--and tends to predict Freddie Mac's weekly survey with high accuracy.  It's safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie's once-a-week polling method).