Mortgage Rates September 5, 2017

Mortgage rates for September 5th, 2017 will be slightly better to start the week as bonds begin the day in rally mode.  Friday we had the monthly Jobs report, along with the ISM reading and the University of Michigan Consumer Sentiment report.  The strong ISM reading caused some selling which put some pressure on mortgage rates heading into the mortgage interest rateweekend.  Today we had ISM-New York, Factory Ex-Transport and Factory Orders.

As of this morning we’re seeing 30 year fixed mortgage rates below 3.875%, 15 year fixed rates below 3.25% and 7/1 ARM rates below 3.375% (conforming, zero points) – the cost to obtain these mortgage rates has lowered since Friday.  Mortgage rates for some “A” level borrowers (high credit score, low loan to home value ratio, low debt to income ratio and no cash out) are as low as 3.625% on the 30 year fixed rate loan program (conforming, zero points) and on the 15 year as low as 2.875% (conforming, zero points).  Mortgage rates for refinance and home purchases are close to breaking into new territory for 2017 as bonds start off the week with a strong rally.

The 10y yield opened the day at the 2.14% level before moving down below 2.11 after a tweet from President Trump.  The 30y FNMA 3.5 coupon opened the day at the 103.45 level before moving to the 103.65 level after the tweet from the President.  So what did the President tweet that caused bonds to rally?  

“I am allowing Japan & South Korea to buy a substantially increased amount of highly sophisticated military equipment from the United States.”

Almost immediately after this bonds started to rally and it’s intensity has only strengthened in the following hours. It appears the market did not take the seriousness of the North Korean situation seriously with his previous comments/tweets and now they are playing catch-up.