Mortgage rates moved decisively lower today following a much weaker-than-expected reading on new job creation in a key report from the Department of Labor.  The payroll count in the big jobs report fell to 75k in May compared to a median forecast of 185k.  The previous two months were also revised moderately lower.

Taken together the update on jobs calls into question the strongest and most resilient component of the current economic expansion in the US.  This is important for two reasons.  First, a strong economy is better able to support higher rates (more people working = more people able to make higher payments).  Second, one of the Fed's mandates is "full employment."  If this drop in the job count precedes an increase in unemployment, it adds to the already growing case for a Fed rate cut this summer.

While the Fed doesn't set 30yr fixed mortgage rates, Fed rate hike/cut expectations definitely correlate quite well with movement in longer term rates like 10yr Treasury yields and mortgages.  Markets think the Fed stands a very good chance to cut rates by July--a viewpoint that has just come into full focus this week.  As it has, rates have dropped at their best pace of the year to the lowest levels since September 2017.

Loan Originator Perspective

Bond markets rallied today, on a dismal May NFP jobs report and downward revisions to April's.  Continuing Tariff Trauma is helping bonds as well, combined with general Washington DC uncertainty.  While rates won't improve every day, the overall trend is our friend.  I am only locking loans closing within 15 days, unless clients have minimal risk tolerance. -Ted Rood, Senior Originator

Bonds have been able to hold onto the huge gains of the last week.   The 10 year is up against resistance around 2.06ish.   Until that breaks, we probably won't see much more improvement.   If you have been floating for the last couple weeks, you should be seeing a much better rate.  Nothing wrong with locking in those gains.   They could disappear very quickly, especially if we start getting positive updates on the trade war with China.   -Victor Burek, Churchill Mortgage

Today's Most Prevalent Rates

• 30YR FIXED - 3.875% 
• FHA/VA - 3.75%
• 15 YEAR FIXED - 3.75% 
  
• 5 YEAR ARMS -  3.875-4.25% depending on the lender

Ongoing Lock/Float Considerations 

• Early 2019 saw a rapid reevaluation of big-picture trends in rates and in markets in general
  
  
• The Federal Reserve has been a key player, and while they aren't the ones pulling the global economic strings, their response (and even their EXPECTED response) to the economy has helped rates fall more quickly than they otherwise might.
  
  
• Based on the Fed's laundry list of concerns, the bond market (which determines rates) will be watching economic data closely, both at home and abroad, as well as trade-related concerns. The stronger the data and trade relations, the more rates could rise, while weaker data and trade wars will lead to new long-term lows.  

• Rates discussed refer to the most frequently-quoted, conforming, conventional 30yr fixed rate for top tier borrowers among average to well-priced lenders.  The rates generally assume little-to-no origination or discount except as noted when applicable.  Rates appearing on this page are "effective rates" that take day-to-day changes in upfront costs into consideration.