30-year fixed mortgage rates rose last week, marking the first time in a month that rates failed to fall week-to-week.

The data sources from Freddie Mac, one of the government’s major mortgage securitizers and a sister entity to Fannie Mae. Each week, Freddie Mac collects mortgage rate data from more than 120 lenders nationwide and publishes the results in a report called the Primary Mortgage Market Survey.

According to this week’s PMMS, the 30-year fixed rate rose 0.02% and now averages 4.21% nationally. The average accompanying cost is 0.8 points.

1 point is equal to 1 percent of the loan size.

Note, though, that these are just averages. Just as real estate markets are local, mortgage rates can be, too. As an illustration, look how this week’s rates break down by region:

• Northeast : 4.22 with 0.8 points
• Southeast : 4.30 with 0.8 points
• N. Central : 4.19 with 0.8 points
• Southeast : 4.23 with 0.7 points
• West : 4.17 with 1.0 points

The rate-and-fee combination you’d get in your home state of Arizona , in other words, is different from the rate-and-fee combination you’d get if you lived somewhere else. In the West, rates are low and fees are high; in the Southeast, it’s the opposite.

The good news is that, as a rate shopper, you can have it whichever way you prefer. If getting the absolute lowest mortgage rate is worth the extra cost to you, the Tucson Mortgage Team mortgage team can help. Or, if you prefer higher rates and lower costs, you can go that route, too.

Banks offer multiple mortgage set-ups to meet every type of budget and, with rates down 1.00% since April 8, there’s good cause to call your loan officer about a mortgage refinance. See what set-up will work best for you.

For the third straight week, mortgage markets showed little conviction in the face of contrasting data. Mortgage bonds ended the week slightly better, but mortgage rates did not.

Conforming mortgage rates in Arizona were up-and-down all week before ending the week with a slight worsening. The inter-day volatility has come to characterize the current mortgage market.

In part, rates are jumpy because of data; it’s unclear when the economy is expanding or contraction — despite the “official call” of the recession’s end in June 2009.

Consider the conflicting reports from last week. Separate Consumer Confidence reports showed sentiment falling in September, but on the other hand:

• Initial jobless claims dropped 3%
• Household income is shown to be rising
• GDP is improving year-over-year

In other words, the economy is in recovery, but the average Tucson citizen isn’t believing it. That causes purse-strings to stay tight, thereby retarding economic growth.

Wall Street is struggling with the contrast, and constantly changing its outlook.  It’s making mortgage rates tough to pin down and this week should reflect that. In addition to a home sales report and new consumer confidence data, the government prints its market-moving Non-Farm Payrolls report.

More commonly called “the jobs report”, Non-Farm Payrolls details the workforce, its size, and its Unemployment Rate.  There’s expected to be little change from August, a month considered “fair” by recent employment standards. If the jobs report shows improvement and/or strength, look for mortgage rates to rise. If the report does deterioration and/or weakness, look for mortgage rates to fall.

The Non-Farm Payrolls will be released Friday at 8:30 AM ET.

The Federal Open Market Committee adjourns from its 6th scheduled meeting of the year today, and 7th overall.

Upon adjournment, Federal Reserve Chairman Ben Bernanke will release a formal statement to the market. In it, the Fed is expected to announce “no change” to the Fed Funds Rate.

Currently, the Fed Funds Rate is within a target range of 0.000-0.250 percent.  It’s been at this same level since December 2008.

Note that the Feds Funds Rate is not “a mortgage rate” — nor is it a a consumer rate of any kind. The Fed Funds Rate is a rate that defines the cost of an overnight loan between banks. And, although the Fed Funds Rate has little direct consequence to everyday Tucson homeowners, it is the basis for Prime Rate, the interest rate on which most consumer cards are based, plus many business loans, too.

Therefore, because the Fed Funds Rate won’t change today, neither will credit card rates.  Mortgage rates, however, are a different story.  Mortgage rates should change today — regardless of what the Fed does.

It’s more about what the Fed says.

In its statement, the Federal Reserve will highlight strengths and weaknesses in the economy, and threats to growth over the next few quarters. Depending on how Wall Street interprets these remarks, mortgage rates may rise or fall.

If the Fed’s comments signal better-than-expected growth, bond markets should lose and mortgage rates should rise. Conversely, if the Fed’s comments signal worse-than-expected growth, mortgage rates should fall.

If you’re actively shopping for a mortgage, it may be prudent to lock your rate ahead of the Fed’s announcement today. The Fed adjourns at 2:15 PM ET.  Call the Tucson Mortgage Team at 520-331-LEND (5363) to lock your rate.

The Fed meets 8 times annually.

Want a lower mortgage rate on your upcoming Tucson home buy? Think about moving up the closing date.

The reason is rooted in “rate locks”, a bank’s guarantee to honor a specific mortgage rate for a specific, finite period of time. Rate locks allow home buyers to reserve mortgage rates today even though their respective closings may be scheduled as far as a year into the future.

A rate lock is a contract. No matter what the “current market rate” is at the time of closing, the bank will honor the terms of the original rate lock.

It would be like making an agreement to buy Microsoft stock at a specific price 60 days from now. No matter what the price, you already know what you’re paying for it.

In this sense, rate locks are predictions about the future and, meanwhile, as we all know, the future can be a challenge to forecast. Lenders know this, too, of course, so it’s easy to understand why longer rate locks tend to be more expensive than shorter ones.

The longer the rate lock, the more risk to the bank.

To compensate for this “time risk”, therefore, lenders typically step-up pricing for rate lock guarantees as lock period lengthen.

• 15-day rate lock : The best of all pricing
• 30-day rate lock : 1/8 percent extra cost versus the 15-day rate lock
• 45-day rate lock : 1/4 percent extra cost versus the 15-day rate lock
• 60-day rate lock : 3/8 percent extra cost versus the 15-day rate lock

One percent of “extra cost” is defined as one percent of the borrowed amount.

Now, this incremental price chart is just a rough guideline; exact spreads vary from lender-to-lender. Overall, however, it’s fairly close.

That’s why it’s important to manage your closing date vis-a-vis your mortgage rate. Closing in 30 days versus 31 can save you an eighth-percent in closing costs. Assuming a loan size of $200,000, that’s $2,500 saved.

So, when negotiating a closing date on a contract, keep in mind the math of mortgage rate locks. The shorter its length, the more money you might save.

Give the Tucson Mortgage team a call at 520-331-5363 (LEND) to discuss your potential savings based on you lock period.

On the first Friday of each month, the Bureau of Labor Statistics releases Non-Farm Payrolls data for the month prior.

The data is more commonly called “the jobs report” and it’s a major factor in setting mortgage rates for residents of Arizona and homeowners everywhere. Especially today, considering the economy.

This is because, although it’s believed that the recession of 2009 is over, there’s emerging talk of new recession starting.

Support for the argument is mixed:

1. Job growth has been slow, but planned layoffs touch a 10-year low
2. Consumer confidence is down, but beating expectations
3. Consumer spending is weak, but not declining

In other words, the economy could go in either direction in the latter half of 2010 and the jobs market may be the key. More working Americans means more paychecks earned, more taxes paid, and more money spent; plus, the confidence to purchase a “big ticket” items such as a home.

Jobs growth can provide tremendous support for housing, too.

Today, though, jobs growth was “fair”. According to the government, 54,000 jobs were lost in August, but that reflects the departure of 114,000 Census workers.  The private sector (i.e. non-government jobs), by contrast, added 67,000.

In addition, net new jobs was revised higher for June and July by a total of 123,000.  That’s a good-sized number, too.

Right now, Wall Street is reacting with enthusiasm, bidding up stocks at the expense of bonds — including mortgage-backed bonds.  This is causing mortgage rates to rise.  Rates should be higher by about 1/8 percent this morning.