Home > Blogs > Jason E. Gordon > Mortgage Street Smarts

Mortgage Rate Update 5-30-14: Trends & Projections

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

May 30, 2014 01:58 AM

It has been a volatile morning thus far. The data released at 8:30am EST matched expectations and initially had little impact. April Core PCE inflation rose 0.2% from March and was just 1.4% higher than one year ago. April Personal Income increased 0.3% from March. MBS prices then began to drop around 9:00am EST ahead of the 9:45am release of Chicago PMI, which jumped to the highest reading since March 2011.

Pricing has opened 0.125 WORSE to the points/credits associated with each interest rate option.

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 over 2 years at www.JasonGordon.info whenever desired. To make things easier, I have also posted a quick report on How To Read The Charts Below.

Also, make sure to learn THE TOP 10 THINGS TO KNOW ABOUT MORTGAGE RATES (to help understand the relationship between rates & fees/credits) along with 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). Remember, we all make better decisions in life when we have the actual facts to analyze...share this report with those whom you care about!

San Diego Mortgage Rates - Jason Gordon - www.JasonGordonMortgage.com

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

The following information is current as of Friday 5-30-2014 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 closed Thursday with a WORSENING to pricing. Thursday's WORSENING netted a change of 21 basis points (bps).

(Note: Upward activity on these charts is GOOD, downward activity is BAD)

Gordon Mortgage Group - San Diego - www.GordonMortgage.com

The following chart summarizes todays market activity:

Gordon Mortgage Group - San Diego - www.GordonMortgage.com

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.

Gordon Mortgage Group - San Diego - www.GordonMortgage.com

Market Commentary (Neil Trenerry)

FNMA

Cpn 3.0 Chg -0.1250 Bid 98.71875

Cpn 3.5 Chg -0.0156 Bid 102.87500

Cpn 4.0 Chg 0.0000 Bid 105.78125

Treasury

UST 5 YR Chg 0.0078 Bid 99.84375 Yield 1.5330

UST 10 YR Chg 0.0156 Bid 100.28125 Yield 2.4680

UST 30 YR Chg 0.1250 Bid 101.00000 Yield 3.3220

Currency

Euro Bid 1.3630 Chg 0.0029

Pound Bid 1.6757 Chg 0.0041

Yen Bid 101.670 Chg -0.130

Light Crude

Last 102.89

Key Economic Data:

PCE for Apr

Personal Consump Real: Actual -0.3%, Last 0.7%, Revised 0.8%.

Personal Income: Actual 0.3%, Consensus 0.3%, Last 0.5%.

Price index MM: Actual 0.2%, Last 0.2%.

Core Price Index MM: Actual 0.2%, Consensus 0.2%, Last 0.2%.

Price index YY: Actual 1.6%, Last 1.1%.

Core Price index YY: Actual 1.4%, Last 1.2%.

6:45: Chicago PMI for May: Consensus 61.0, Last 63.0.

6:55: Univ of Michigan for May

Sentiment: Consensus 82.5, Last 81.8.

Condition: Consensus 95.8, Last 95.1.

Expectation: Consensus 74.0, Last 73.2.

1Yr Inflation: Last 3.2%

5-Yr Inflation: Last 2.8%.

7:30: ECRI Weekly Index: Last 135.1.

Advice:

Treasuries headed for the biggest monthly gain since January as signs the economy is falling short of expectations led investors to unwind bets against bonds. Ten-year notes briefly extended gains as a report showed consumer spending unexpectedly fell in April. Mixed economic data are disappointing investors who expected quickening growth and bet against Treasuries with so-called short positions. The U.S. economy shrank in the first quarter, the government reported yesterday. Separate data today will show consumer

confidence rose, based on Bloomberg surveys of economists. The personal spending component was disappointing for the economy, and thats why youre seeing a bid to bonds here, Gary Pollack, who manages $12 billion as head of fixed-income trading at Deutsche Bank AGs Private Wealth Management unit in New York, said after the report. The U.S. 10-year note yielded 2.46 percent at 8:51 a.m. New York time, according to Bloomberg Bond Trader prices. It touched 2.45 percent, after falling yesterday to 2.40 percent, the

lowest since June 21. The Bloomberg U.S. Treasury Bond Index rose 1.1 percent in May through yesterday, pushing its gain for 2014 to 3.5 percent. The Bloomberg Global Developed Sovereign Bond Index advanced 0.4 percent in May and is up 4.3 percent this year.

Treasuries are gaining because of reduced concern on inflation, said Robin Marshall, director of fixed income at Smith & Williamson Investment Management in London. Growth doesnt pick up at a pace some may have expected and market inflation expectations have fallen. Investors are paring back their bets on rate increases.

My position on MBS:

Short term changes to Neutral.

Long term stays Short.

Long = I anticipate pricing to improve which leads to lower Rates.

Neutral = Market should stay close to open plus or minimums 25bps.

Short = I anticipate pricing to weaken which leads to higher Rates.

Short term = 1 - 2 days out

Long term = 30+ days out

Market Commentary (Dan Rawitch)

Michigan Sentiment and Chicago PMI both beat expectations. However, I would consider this move as a technical correction, driven by some wise profit taking. I suspect we will hold within 10-15bps of this level. If not, we will test 105.20. In either case, this is a healthy correction and should prove to be part of an overall bigger move up. We just dont know how long the correction will last and if you have borrowers on the fence, I would use this opportunity to pull them over to your side.

http://www.ratewatch.com/ratewatchnow.html

Trusted Industry Advisor

San Diego Mortgage Rates - Jason Gordon - www.JasonGordonMortgage.com

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. All Market Commentary is provided via The Mortgage Coach and/or their RateWatch technology software.

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.GordonMortgage.com or www.ApprovingSD.com or more information.

Click here for daily mortgage interest rate updates and projections for San Diego's best mortgage interest rates