Seattle Mortgage Rates For The Week of March 8th

It’s been a fairly bland week in terms of mortgage rate activity, although that’s a good thing when rates are hovering between 4.75 and 5%.  After two dataless days to start the week and little or no movement in mortgage rates, action picked up on Wednesday. Mortgage rates opened the day lower and after a big turnout at the 10 year Treasury note auction, yields increased and mortgage-backed security prices moved higher into the close.  We expected a lender reprice with better rates, but it didn’t happen.

We had a couple of scheduled economic reports that were released early enough to sway the direction of mortgage rates on Thursday.  First we got Weekly Jobless Claims from the Department of Labor.  This report provides three measures on the health of the labor market:

1. Initial Jobless Claims:  totals the number of Americans who filed for first time unemployment benefits
2. Continued Claims:  totals the number of Americans who continue to file for benefits due to an inability to find a new job
3. Extended Benefits:  totals the number of Americans who have exhausted their traditional benefits and are now receiving emergency benefits

Since our economy is driven by consumer spending, market participants track employment data to get a sense of economic momentum.  While an increase in jobless claims is a bad sign for the economy, weak data generally helps mortgage rates move lower.  Lender rate sheets came in just slightly worse than yesterday, they are really unchanged for the most part.

The par 30 year conventional rate mortgage remains in the 4.75% to 5.00% range for well qualified borrowers.  To secure a par interest rate you must have a FICO credit score of 720 or higher, a loan to value at 80% or less and pay all closing costs including an estimated one point loan origination/discount/broker fee.   If you are seeking a 15 year term, you should expect rate in the 4.25% to 4.50% range.  You may elect to pay less in fees but you will have to accept a higher interest rate.

Friday morning we have Retail Sales, Consumer Sentiment and Business Inventories reports.  Of the three, the Retail Sales report has the highest potential to affect the markets and mortgage rates. Better than expected results would move rates higher while worse than expected results would only improve mortgage borrowing costs slightly.  I continue to advise clients to lock now as rates continue to hold at the best levels of the year and the market shows no willingness to drive mortgage rates lower.