The market was closed yesterday in observation of President's Day. Despite a strong start to today's trading, we ended the day on a skid, losing a net of 12 basis points.
This daily mortgage interest rate report is designed to provide Borrowers & Real Estate Profesionals with factual data regarding where rates are at any given time and what trends are propelling current mortgage pricing on any given day. Feel free to browse the library and research historical rate updates dating back nearly 2 years at www.JasonGordon.info whenever desired. Also, make sure to learn about THE TRUTH BEHIND MORTGAGE QUOTES to better understand the relationship between up-front closing costs and mortgage interest rates so you don't get duped by clever advertising campaigns.
The Mortgage Street Smarts of where mortgage interest rates are going (and why):
The following information is current as of Tuesday 2-19-2013 and will help you understand today's 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 was closed Monday in observation of President's Day.
(hint: upward activity is good, downward activity is bad)
The following chart shows a summary of today's activity:
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 (Bill Fisher):
In a report released last week, ForeclosureRadar cited the fact that fewer foreclosures were initiated in prominent Northern California Counties-- Santa Clara, Alameda, San Mateo and Contra Costain January than at any time since 2006. Notices of default fell lower than any levels achieved since the firm began recording data in September of that year. Similarly, notices of sales fell to 2007 levels. And the number of homes actually sold on courtyard stepsthe standard foreclosure procedurewere at their lowest level since 2007.
One of the things that is a bit odd about this data is that the improvements seem to have occurred all at once rather than sequentially. We might have expected the foreclosure initiations to decrease first, then the notices of sale, and finally, the actual foreclosures. That they didnt fall sequentially suggests that were seeing a change in attitude among many lenders, more than that were seeing a change in the number of foreclosures that could, in more ordinary circumstances, be occurring.
For the ailing homeowner, as for the broader real estate economy, this is good newsmostly. It seems to reveal the changes that are resulting from the fact that major lenders are far more ready and willing to work with their borrowersto engineer short sales that close far more efficiently, to forgive a bit of the owed principal for underwater homes, to help homeowners avoid losing their homes.
I said mostly good news because the real estate market has been thriving, in an awkward way, on investor purchases of distress properties. Last December, 40% of all sales in Sacramento were funded by cash, not by purchase money loans. Since the level of sales was high, this is somewhat sobering. It suggests that the volume of real estate sales is currently dependent on factorslike heavy investor participationthat arent usually as significant in a normal market.
It means, most likely, that the strength of the market is being exaggerated by unusual investor activity. And, unless were wrong here, that activity is likely to slow in the foreseeable future.
Further, real estate consultancy RealtyTrac noted that Januarys dramatic decline in foreclosures is a widespread phenomenon in California. In Sacramento, for example, the numbers were the lowest sinceyou guessed it2007. And RealtyTrac linked the improvement to the implementation of the Homeowner Bill of Rights in California, which became law on January first.
Lo and behold, for the first time since January 2007, California did not have the most properties with foreclosure filings among all states. [Peter Carey, Sacramento Bee]
But notice well the full implications of this. First, Big Lenders seem to be much more willing to work with buyers and avoid foreclosures. Its early in the game, but if youre wondering why the Big Lenders are suddenly anxious to reduce the number of foreclosures (and youre probably not wondering, actually), its extremely likely that the minefield for lenders created by the Homeowners Bill of Rights will make lenders far more reluctant to start up foreclosure processes.
If this is so, is it good? Only time will tell. The downside is that it will decrease the number of foreclosures and distress listings that have fueled the investor market, quite possibly slowing the rise of home prices as a result.
The other side of that coin, though, is that, at the same time that they slow the advance of home values, the reduced foreclosure filings are likely to bring more homes to market, as fewer potential sellers wait for home prices to rise further before listing their homes. And that should mean more sales, more activity, more profitsand more new construction.
But it also means that we lose one artificial support for salesthe foreclosure market that has created such a following among investorsand substitute another artificial supportthe concern about bill-of-rights-inspired litigation that will make lenders see red when they consider initiating foreclosures.
So who knows when well have a market that is walking entirely on its own legs? Were talking real estate here, and the answer is probably, Never! It is incumbent upon us, therefore, to watch the artificial forcesthe legislative acts, the attempts by the government to support homeownership rates, the regulations surrounding lending practicesif we want to have any idea of where the market may be going next.
Meantime, we may be seeing another force that could retire the Shadow Market that, to this day, economists warn us about so vehemently.
Trusted Industry Advisor
The above information was compiled and distributed by San Diego Residential Mortgage Specialist, Jason E Gordon in an effort to provide transparency regarding true mortgage rate activity and market guidance to consumers and professionals interested in this activity.
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.jasongordon.net or www.ApprovingSD.com or more information.
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