What are California's best mortgage rates? What can we expect from mortgage rates for the remainder of this year? All Real Estate Professionals & Consumers are advised to stay informed about interest rates and learn THE TRUTH BEHIND MORTGAGE QUOTES. Whether you're a newbee, market analyst (or somewhere in between), keep yourself informed of where mortgage interest rates are going (and why).
The Mortgage Street Smarts of where mortgage interest rates are going (and why):
The following information is current as of Monday 12-5-2011 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 Friday with an IMPROVEMENT to pricing (and will typically warrant a pricing adjustment by most Lenders). Friday's IMPROVEMENT resulted in a change of 34 basis points (bps).
The following chart shows the market activity for 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 Trenerry
Previous close 102.156
Opened Down 0.156 @ 102.000
Key Economic Data:
UST 2 YR 0.27 Up 0.01
UST 5 YR 0.97 Up 0.05
UST 10 YR 2.09 Up 0.06
UST 30 YR 3.08 Up 0.06
EUR / USD 1.3449 Up 0.0058
USD / JPY 77.9400 Down 0.0500
GBP / USD 1.5661 Up 0.0064
Oil 102.23 Up 1.27
Gold 1,738.00 Up 13.30
Key Economic News:
ISM non-manufacturing index and factory orders:
10:00: ISM non-manufacturing index (November): Steady. At its current level, the index has been historically consistent with GDP growth of around 1.75%. We will be watching for further signs of disinflation in the report’s prices paid measure.
Consensus: 53.8; Last 52.9.
10:00: Factory orders (October): GDP implications? The already-released durable goods report suggests that total factory orders likely declined in October. Revisions to durable goods shipments or news on inventories could affect our bean-count estimate of Q4 GDP growth.
Consensus: -0.3%; Last +0.3%.
12:10: Chicago Fed President Charles Evans on the economic outlook and the Fed’s dual mandate.
Advice:
With ISM expected to improve, and Factory orders expected to decline. I expect the MBS market to be watching Europe. I would expect the market to stay in a close trading range. Unless the Feds are buying the market.
My position on MBS stays neutral.
Analyst #2: Lou Barnes
Everybody struggles now to find guideposts in the thicket of new economic information. Two old ideas may help. First, the time-sense of humanity is more calibrated to getting the bear out of the cave than musing about why bears like caves. Second, a version of frog-in-hot-water: we tend not to notice the gradual onset of lunacy, grasping the insanity only in retrospect.
US data are pretty good -- relative to fears of new recession. November payrolls gained 120,000 jobs, and inclusive of all revisions added that many to prior months. If markets had any idea in September that payrolls had jumped by 210,000, double the original announcement, we would not have had that mortgage refinance party.
Reality break: the Treasury borrows and spends about $120 billion each month, and for that stimulus we get 120,000 jobs. Instead, why not just pay each of these people a million bucks and let them stay home? Europe is struggling with austerity, not us. Yet.
Markets liked the rise in the November ISM manufacturing index from 50.8 to 52.7, "50" a breakeven economy. A major part of that improvement is coming from much better sales of cars, at a 13.6 million annual pace in November, way up from the barely 9 million in 2009.
Retro-perspective: we junk about 14 million cars each year. They wear out, unlike houses. Thus we are just now touching replacement-rate sales. Credit is restored for car buyers, unlike houses, which require rather larger loans and are harder to repossess (state Attorneys General have discovered that it's cheap to buy votes by stopping foreclosures). Oh-by-the-way, the ISM in China fell to 49, and Europe to 46.
The strength in the stock market is a great thing; Dow 12,000 in new statements will reassure households. Fine, disciplined money-managers (Brad Bickham and Gary Beels in town), as opposed to the drunks on CNBC, point to solid corporate earnings miles above the return on bonds. Some stocks pay dividends beating bond yields.
Fluff, huff and puff… Wednesday's 500-point up-day was the direct result of global central banks' rescue of European banks. A run began on European banks 18 months ago, and intensified in July, including huge dollar deposits fleeing home, out of Europe for safety. The ECB can replace euros running, but needed other central banks to replenish dollars. The good-news intervention that caught so many short stocks was actually confirmation of very bad news.
Everyone is exhausted with Euro-soap and its fantastic display of self-deception, but it is more important than any other economic development. The next can-kick is scheduled for December 9, this time fiscal discipline to be enforced by surrender of sovereign budget authority to European Union bureaucrats in Brussels. Once that discipline is established, the IMF and ECB are supposed to ride to the rescue. Joined presumably by the Mounties, Mighty Mouse, and Batman.
Better to kick an anvil than this can. The central purpose of any parliament since the Magna Carta, since Rome, is the power of the purse. In the best lunacy check of the week, Nicolas Sarkozy: "It is not by going down the path of more supranationality that Europe will be re-launched." Aha. France refuses external fiscal discipline not merely for its immense pride, but because its own situation is so dire that it cannot meet the requirements of the existing treaty. If France refuses, who would accept?
Germany's unemployment has fallen to a two-decade low 5.5%. Spain's is 22%. There is no rational basis for these nations to bolt themsleves to a common currency. One needs a much stronger one, and the painful lesson of the cost of beggar-thy-neighbor export mania, and the other desperately needs to devalue to revive exports.
The greatest hazard lies in continuing this charade. The most helpful and hopeful line of the week came from Jurgen Hoffman, finance director at Volkswagen Autoeuropa (from FT): "The overall impact [of leaving the euro] would not be so negative for our company." The primary impediment to ending the euro fantasy now seems to be politicians trying to preserve themselves; the commercial world is more than ready.
Trusted Industry Advisor
The above information was compiled and distributed by San Diego Residential Mortgage Specialist, Jason E Gordon. As a Certified Mortgage Planning Specialist (CMPS) Certified Distressed Property Expert (CDPE) and Certified Mortgage Coach (CMC), Jason E Gordon utilizes his advanced training to examine a prospective Client's complete financial picture, while carefully listening to their overall goals. If it is mutually agreed that a new loan makes sense to pursue, Jason strives to make the entire loan process as seamless as possible. He truly believes that providing open communication and patient educational guidance to his Clients and Business Alliances has been a pivotal component to building his business, while enhancing his reputation in the Mortgage Industry as a Trusted Advisor. Visit www.jasonegordon.com or www.ApprovingSD.com or more information.
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