Yesterday Freddie Mac’s Primary Mortgage Market Survey saw hit new record lows, with the average rate on a 30 year fixed rate mortgage hitting 3.87%. Based on the events of this morning, I do not think we will see a new record next week.
Mortgage rates are rising on the basis of a relatively strong jobs report this morning. Unemployment dropped to 8.3% in January, and we added 243,000 jobs. Employment in November was adjusted upward from +100k to +157k, while December’s numbers were revised upward from +200k to +203k. While this looks good on its face, when you look a little deeper, there are some problems here. The labor force participation rate fell to 63.7, which is a 30 year low, and the number of people that dropped out of the labor force fell by 1.2 million, which is a record. So unemployment is falling, due at least in part to the fact that the number of unemployed people being counted is reduced.
Still, stocks are rallying early, while mortgage backed securities and treasury bonds are getting crushed. While rates will rise today, I expect that we will see them adjust back downward next week, as soon as people remember that Europe is a mess, and there still appears to be a ways to go before a Greek debt settlement is reached. Further, it seems likely that Portugal, and maybe other European nations with unmanageable debt loads will follow Greece’s example and ask their bondholders to take significant haircuts. I think the European situation will keep rates from really spiking in the near future.
Some of Our Most Popular Rates and Products*:
| Mortgage Product | Mortgage Rates | APR |
|---|---|---|
| 30 Year Fixed Conventional Mortgage | 3.625% | 3.657% |
| 20 Year Fixed Conventional Mortgage | 3.625% | 3.780% |
| 15 Year Fixed Conventional Mortgage | 3.125% | 3.322% |
| 30 Year Fixed FHA Mortgage | 3.625% | 4.975% |
| 15 Year Fixed Conforming Jumbo | 3.500% | 3.670% |
| 30 Year Fixed Conforming Jumbo | 4.375% | 4.474% |
| 5/1 Adjustable Rate Mortgage | 2.375% | 2.437% |
| 5/1 Adjustable Rate Conforming Jumbo Mortgage | 2.750% | 2.711% |
***Mortgage rates change often. The above rates were quoted at 1:15 P.M., on February 3, 2012. Call 877-868-2503 for more details.***







