Freddie Mac reported the 30 year fixed rate rose slightly to 3.70% from 3.69% while the 15 year fixed rate also bumped up a notch from 2.97% to 2.98%.
One year ago, the 30 year fixed rate stood at 4.40%. A homebuyer purchasing today would save $40 per month per $100,000 borrowed compared to last year’s homebuyer.
Click here for a personalized rate quote.
We can expect even lower rates to come.
Friday’s Unemployment report for March was a shocker. While the unemployment rate in fact held steady at 5.5%, the number of new jobs created was more than disappointing. The market expected something near 245,000 new non-farm payroll jobs added whereas only 126,000 were reported, nearly half market expectations.
At the same time, February job numbers were revised downward by 31,000 and January followed suit shedding an additional 38,000. The 126,000 count was the lowest since late 2013.
Wall Street was closed on Friday but mortgage backed securities were still traded and mortgage rates look to pull back as a result of the weak unemployment numbers.
Mortgage Rate Forecast
- The unexpected pullback in new jobs should have investors pulling more money out of stocks and back into safer, although lower yielding bonds. This is being seen in all sorts of securities. Immediately after the unemployment report was released, the 10-year yield plunged to 1.84%. As 10-year yields drop, so do 30-year fixed mortgage rates.
- The Fed will likely hold on raising short term rates. Investors expected a June increase of 0.25%. While the Fed doesn’t directly control long term fixed rates, low short term rates often help long term rates stay low.
- A relatively quiet week regarding economic reports this week, with perhaps the FOMC minutes released this Wednesday having some impact, yet with the surprising jobs data, the minutes might be disregarded.
Lower Rates to Come – Most Likely
We’ve seen a gradual run-up in rates since the first of the year with rates reaching a 2015 high on March 12 when the 30 year rate hit 3.86% then floating down to its current range. In light of the weak jobs data and lower expectations for near term growth, lower rates in general can be expected. Later this month the initial estimate of GDP for Q1 will be released and in all likelihood the current forecast by many economists of 1.6% growth will be lowered.