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San Diego Mortgage Interest Rate Update 2-17-2011 + Projected Trends & Today's Best Mortgage Rates

By
Mortgage and Lending with CMG Mortgage, San Diego, CA NMLS 259027

Introducing an easy-to-follow inside look at mortgage rate activity, featuring charts, rate sheets, market commentary, and even video recordings all in one daily morning blog! Whether you're a newbee, market analyst (or somewhere in between), keep yourself informed of where mortgage interest rates are going (and why). Subscribe to this free daily update by clicking the button on the right hand side of this page and always be aware of todays best mortgage rates. Although the title of this blog mentions San Diego, these updates are good for the entire state of California.

While basic understanding of the "book smarts" within the mortgage industry will help you understand specific terminology, loan programs, and features, there is so much more you will need to know in order to make an informed financial decision.

My approach to providing education strives to further your understanding beyond the "book smarts" of the mortgage industry, and learn the valuable "street smarts" that will help you achieve the best possible results, while avoiding the most common pitfalls that non-informed Borrowers and Real Estate Professionals have experienced.

The Mortgage Street Smarts of where mortgage interest rates are going (and why):

The following information is current as of Thursday 2-17-2011 and will help you understand todays best mortgage rates.  If you are a Buyer/Borrower who is still on the fence (or if you are a Real Estate Agent attempting to educate your "on the fence" Buyer), please review these trends and secure an historically low interest rate before it is too late.

The market closed Wednesday with a WORSENING to pricing (as indicated by the chart below). Note that any movement that exceeds 25 basis points is significant (and will typically warrant a pricing adjustment by most Lenders). Wednesday's WORSENING was 12 basis points (bps).

Mortgage Street Smarts - Daily Interest Rate Updates & Projections - Provided by Jason E. Gordon, CMPS, Direct Lender, Mortgage Broker, San Diego, CA - todays best mortgage rates - www.MortgageStreetSmarts.com

The following chart shows the market activity thus far today (hint: upward activity is good, downward activity is bad):

Mortgage Street Smarts - Daily Interest Rate Updates & Projections - Provided by Jason E. Gordon, CMPS, Direct Lender, Mortgage Broker, San Diego, CA - todays best mortgage rates - www.MortgageStreetSmarts.com

The following chart shows market activity over the past 10 days (hint: green is good, red is bad):

Mortgage Street Smarts - Daily Interest Rate Updates & Projections - Provided by Jason E. Gordon, CMPS, Direct Lender, Mortgage Broker, San Diego, CA - todays best mortgage rates - www.MortgageStreetSmarts.com

The following chart shows market activity over the past 1 month: 

Mortgage Street Smarts - Daily Interest Rate Updates & Projections - Provided by Jason E. Gordon, CMPS, Direct Lender, Mortgage Broker, San Diego, CA - todays best mortgage rates - www.MortgageStreetSmarts.com

Daily Interest Rate Snapshot (sample of rates from one of the country's largest Lenders...individual pricing will vary based on specific Borrower qualifications): NOTE: This Lender has quoted a 1.00% Origination Fee (1 Point) to accompany this pricing. It bears noting that this chart does not necessarily represent todays best mortgage rates.

Mortgage Street Smarts - Daily Interest Rate Updates & Projections - Provided by Jason E. Gordon, CMPS, Direct Lender, Mortgage Broker, San Diego, CA - todays best mortgage rates - www.MortgageStreetSmarts.com

Market Commentary

Analyst #1: Neil Trenerry

FNMA 30-YR 4.5%

Previous close 100.810
Opened Up 0.28bp @ 101.094

Key Economic Data:

EUR / USD  1.3581  Up  0.0012
USD / JPY  83.4200  Down  0.2605
GBP / USD  1.6136  Down  0.0041

OIL  85.10  Up  0.11
Gold  1,381.40  Up  6.30

Key Economic News:

Sticky Core Index; Claims Bounce After Weather Distortion
Consumer price index rises more than expected, with rents, apparel and education posting notable increases. Initial claims for unemployment insurance backed up in the week of Feb 12, supporting the view that weather had suppressed the Feb 5 reading; continuing claims remained broadly unchanged.

KEY NUMBERS:
Consumer price index +0.40% in Jan (mom, +1.6% yoy) vs. median forecast +0.3%.
Ex food and energy +0.17% in Jan (mom, % yoy) vs. median forecast +0.1%.
Initial claims +25k to 410k in week ended Feb 12 vs. median forecast 400k.
Continuing claims +1k to 3.911 million in week ended Feb 5 vs. median forecast 3.893 million.

MAIN POINTS:
1. The consumer price index opened 2011 on a sticky note, with the core index posting its largest increase (+0.17%, rounding to +0.2%) since October 2009 (+0.21%). As we had anticipated, both owners' equivalent rent and rent of primary residence were up, 0.1% and 0.2%, respectively. Other areas of notable high-side increases included apparel (+1.0%) and education (+0.6%). The report was not without its weaker spots as medical care was up only 0.1% (a dip in the cost of services offsetting increases in medical commodities) and lodging away from home fell 1.0%. The year-to-year trend jumped 0.3 points to 1.0% as an anomalous -0.13% reading for Jan 2010 dropped out of this calculation.

2. Energy and food both helped push the headline CPI up a solid 0.4%, rising 2.1% and 0.5%, respectively. The net effect was in line with our expectations, but food was up more and energy less.

3. Initial claims increased more than expected, rising 25k to 410k in the week ended Feb 12. This increase reversed about three-quarters of the previous week's sharp decline, consistent with the view that the Feb 5 reading was probably distorted by poor weather. Continuing claims remained almost unchanged (up 1k to 3.911m) in the week ended Feb 5. Extended benefits (which are not seasonally adjusted) decline by around 80k in the week ended Jan 29.

10:00: Philadelphia Fed business index for Feb...a modest acceleration?  Forecasters expect a result similar to the Empire index, which posted an increase of about 3½ points earlier this week.

Median forecast (of 55): +21, ranging from +15 to +25; last +19.3. 

10:00: Index of leading indicators for Jan...permit us to say this will pause....due mainly to the correction in permits reported yesterday, which slices 29bp off the January change after adding 41bp in December.  (This was not quite as big a drop in permits as we had penciled in, so we now expect a flat reading instead of -0.1%.)  Real M2 and the manufacturing workweek for production and nonsupervisory workers should also be negatives, the latter due to weather-related difficulties in getting to work.  So this reading on the index should be seen as an understatement of the underlying trend.

Median forecast (of 54): +0.2%, ranging from -0.7% to +0.7%; last +1.0%. 

10:00: Mortgage delinquencies and foreclosures for Q4...hopefully signs of less stress.  The Q3 reading on the delinquency rate (the percentage of loans past due by 30 days or more) was 9.13%, down from a peak of 10.06% in Q1.  Over the same period the percentage of loans in foreclosure proceedings has dropped from 4.63% to 4.39%, but initiations of foreclosures have actually risen to 1.32% from 1.17%.  (They had been as high as 1.47% in mid 2009.)

10:00: Federal Reserve Chairman Ben Bernanke testifies on implementation of Dodd-Frank...He appears before the Senate Banking Committee along with other key regulators-Sheila Bair for the FDIC, Mary Schapiro for the SEC, and Gary Gensler for the CFTC, and John Walsh for the Office of the Comptroller of the Currency-to discuss progress at the half-year mark after passage of this legislation.

10:00: Treasury Secretary Timothy Geithner testifies on the administration's FY 2012 budget...before the Senate Budget Committee.

16:30: Federal Reserve balance sheet....Last week the balance sheet reached $2.5trn.  We expect it to reach $2.9trn by the time the asset purchase program is done in June.

Advice:

You might want to float with caution today (back in the float camp).

My position on MBS changes to neutral today (Take the hit).

Analyst #2: Dan Rawitch

Here is the link to our daily update 
http://ratewatch.com/ratewatchnow.html

Nice tail wind created by the spike in jobless claims, combined with the fall in the Leading Indicator index.  Add to this a relatively tame CORE CPI number and we should have the push needed to contine our journey toward 101.50

I love that in spite of yesterday's PPI increase, we managed to stay in the channel, thus further confirming the move up.

The above commentary and charts are designed to help you obtain todays best mortgage rates and to further your knowledge of daily mortgage interest rate activity.

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