Mortgage Minute: Big Drop In Home Loan Rates Since September

Tuesday we finally got to see the delayed "Jobs" report, which came out with some mixed information. 

The first part showed that 148,000 jobs had been created which is 35,000 less than the 183,000 that were anticipated (this is good information for the Mortgage Backed Securities or MBS market). The second part was that the national unemployment rate had dropped to 7.2% (this is typically bad information for the MBS markets that drive home loan rates). 

It is the second part of the report that had many armchair prognosticators concerned about the near future of home loan rates, but I think that many investors are starting to realize a couple things. 

First the unemployment rate is just an indicator of those unemployed Americans that are still eligible to apply for unemployment and does not reflect the thousands of Americans that have either given up on seeking work, or that have maxed out their unemployment benefits and can no longer apply. 

Second the mixed data does not give a clear indication that the economy is back on track and therefore tells investors that the Fed will continue buying MBS and US Treasury Bonds. This should help to stabilize home loan rates at least for the short term. That is why I am recommending to float into tomorrow to see if we can close above the 200 day moving average two days in a row. If we can that is a good signal that the rally may have some more legs.

Please watch the attached video to see where home loan rates are at today. If you would like to talk about your specific scenario or needs, please do not hesitate to call or email me directly.

This statement of current rates is not an offer to enter into an agreement for a loan at a specified interest rate, number of points or both. Current interest rates and discount points are subject to change at any time without notice to you. Stated rate examples were calculated using a $300,000 loan amount, 80% LTV and 720 Min Fico at the stated term lengths.  Licensed by the Dept. of Business Oversight under the Ca Res. Mtg. Lending Act.– 431-0421; Rates and charges in the advertisement do not apply to all loans made by the financial institution.

Rob McNelis
Loan Officer - NMLS# 830519
Direct: 619.279.6162
robm@summitmortgage.com
www.robmcnelis.com
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