Nothing moved, and that is the story going into ten o'clock. Bankrate's 30-year conventional prints 6.73% this morning, identical to yesterday, and up a single basis point on the week. The ten-year closed Thursday at 4.687%, up 1.7 basis points on a session Mortgage News Daily described as fairly calm apart from some midday fuel-price pressure, and the UMBS 30-year 5.5 coupon finished at 99.42, off two ticks. Freddie Mac's weekly survey published 6.66% yesterday against 6.65% the prior week, close enough to its high for the year that Mortgage Professional America ran the number as a headline. Fed Chair Kevin Warsh delivers his first Jackson Hole keynote at 10:00 a.m. Eastern, and Mortgage News Daily has been consistent about what that is worth: the focus is customary rather than earned, and Chair speeches there are hit and miss on delivering actual volatility. Two flat sessions in front of a scheduled headline is a coiled setup, not a calm one.
After ten o'clock this week is done. There is no other release with the standing to move the long end, and the calendar stays empty through the holiday weekend until jobless claims on September 3 and the employment report on September 4. Those two are the next real tests, and the employment number is the one that matters, because the September 15 and 16 FOMC meeting carries a Summary of Economic Projections and the committee will have that jobs report in hand when it sets the dots. Fed funds sits at 3.63%. Watch the 4.67% area on the ten-year that capped Wednesday and Thursday both; a clean break above it on a hawkish read this morning is what turns 6.73% into something with a seven handle in front of it, and a failure there again is what keeps the range intact into September.
The conventional number is boring by design at this point, so look one lane over. Today's 6.73% sits a hair under its own 30-day average of 6.74% inside a 6.67% to 6.80% band, and inside a 90-day range of 6.47% to 6.82%. Flat on the week, flat on the month. The interesting spread is the government lane: Bankrate has FHA at 6.34% and VA at 6.38%, putting FHA 39 basis points and VA 35 basis points under the conventional note rate. Over the past eight sessions that FHA-to-conventional gap has run between 25 and 40 basis points, so today is at the wide end of its own recent range. Jumbo is the mirror image at 6.83%, ten above conventional and six wider than yesterday. None of that is a rally. It is a pricing-tier story, and it is the one part of the sheet that actually moved this week.
Today's segment is the borrower sitting near a qualifying line, not the refi list. On a $400,000 loan the FHA note rate is worth about $103 a month against conventional, $77 on $300,000 and $128 on $500,000 - and then annual mortgage insurance takes most of it back, which is exactly why this is a credit-tier conversation rather than a rate conversation. Where the government lane wins is the file where conventional pricing is getting hit hardest: the borrower in the low-700s or below with a thin down payment, where loan-level adjustments and private mortgage insurance stack on top of a rate that already starts 39 basis points higher. Run that file both ways before you quote it, because a 39 basis point spread at the wide end of its range is enough to flip the answer on a borrower you may have already priced as conventional. Do this today: pull the purchase pre-approvals you issued in the last thirty days for borrowers under a 720 score, re-run each one FHA against conventional at today's sheet, and call the two where the answer changed.