Mortgage Rates Officially Hit 2 Month Lows… For Some

While we’re talking about a best-case scenario in line with the 30-year fixed mortgage rate, the average lender officially hit a 2-month low today, just barely outpacing the March 24 average. Used to be. But as soon as we start adding “yes but,” things change.

The first “yes but” is that many borrowers may get higher rates due to changes in upfront costs imposed by regulators (LLPA or “loan-level price adjustments”). These are highly dependent on the scenario (credit score, primary vs. investment property, loan-to-value, etc.).

The second “yes but” is that lenders are generally much more stratified than usual. In other words, the “going rate” for a given lender can be quite different than another’s – especially at face value. Some of this phenomenon is due to the way different lenders use upfront costs in their quoting process. This currently has a major impact as advance “points” can buy at a much higher rate than normal. For example, at some lenders, it will only cost one-tenth of 1% of the loan balance to lower the rate to 0.25%.

All this to say you may not see lower rates today than on March 24, but the average lender is just a hair lower. Clues about changes in the labor market showed an improvement in response to this morning’s Job Openings and Labor Turnover Survey (JOLTS). The report has quickly gained popularity as a market mover, but the most important jobs report (so important it is commonly referred to simply as the “jobs report”) will be released on Friday.