Happy St. Patty's Day! All Real Estate Professionals & Consumers are advised to stay informed about interest rates and learn THE TRUTH BEHIND MORTGAGE QUOTES. 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.
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 3-17-2011 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 an IMPROVEMENT 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 IMPROVEMENT resulted in a change of 31 basis points (bps).
The following chart shows the market activity thus far today (hint: upward activity is good, downward activity is bad):
The following chart shows market activity over the past 10 days (hint: green is good, red is bad):
The following chart shows market activity over the past 1 month:
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.
Market Commentary
Analyst #1 (Neil Trennery):
FNMA 30-YR 4.5%
Previous close 102.594
Opened Down 0.24bp @ 102.344
Key Economic Data:
EUR / USD 1.4009 Up 0.0109
USD / JPY 78.8260 Down 0.7640
GBP / USD 1.6142 Up 0.0118
Oil 99.89 Up 1.91
Gold 1,400.50 Up 4.40
Key Economic News:
Higher-than-expected core CPI
Core CPI higher on owners' equivalent rent, autos, and medical care. Year-on-year rate up to 1.1% from +1.0%. Jobless claims ease a bit as holiday distortion unwinds.
Key Numbers:
CPI +0.5% headline/+0.2% core in January vs. median forecast +0.4%/+0.1%, last +0.4%/+0.2%
Initial claims 385k in March 12 wk vs. median forecast 388k, last 401k
Continuing claims 3.706mln in March 5 wk vs. median forecast 3.750mln, last 3.786mln
Main Points:
1. The consumer price index rose a higher-than-expected 0.546% for the headline and 0.199% for the ex-food and energy aggregate in February. Relative to our expectations, the reasons were a slightly higher reading for owners' equivalent rent (0.14%), a higher reading for autos (+0.5%), and a higher reading for medical care (0.4%). Food (0.5%) and energy (3.4%) prices rose broadly in line with expectations.
2. Today's report adds to the evidence that core inflation has bottomed. Over the past three months, the core CPI has risen 1.8% (annualized), up from 0.7% over the prior three months. However, we would note that CPI data can be noisy on a high-frequency basis and do not expect a rapid acceleration given the still-large slack in the economy and the weakness in wages and unit labor costs.
3. Initial jobless claims retraced part of their increase, falling back to 385,000 from a revised 401,000, in line with expectations. This was probably due to an unwinding of last week's seasonal adjustment difficulties in the wake of the President's day holiday. Continuing claims fell a bit more than expected, to 3.706 million. Jobless claims have been trending down in fits and spurts, consistent with gradual improvement in the labor market
6:15: Capacity Utilization for Feb. Median forecast +76.5% mom; last +76.1% mom.
6:15: Industrial Production for Feb. Median forecast +0.7% mom; last -0.1% mom.
7:00: Leading Indicators for Feb. +1.1% mom; last +0.1% mom.
7:00: Philadelphia Fed Survey for Mar. Median forecast 31; last 36.
Advice:
Japan, and japan's industry that supplies the world with parts for finished products must be a concern to the Fed and business leaders.
My position on MBS stays neutral today.
Analyst #2 (Dan Rawitch):
Here is the link to our daily video
http://ratewatch.com/ratewatchnow.html
I would expect high to extreme volitility today. I would also expect that we could go down and test 102.18ish and we may even go back up and test 102.60. Where she ends, will have everything to do with Japan headlines and other global concerns.
Inflation still our friend. Jobless claims down to 21/2 year low and other important news due out this morning will add to my volitilility prediction. Save yourselves and your clients the drama and make the sale only once, meaning don't sell a rate prediction to get the deal!
Have a great day and don't forget to wear green today.
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