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Mortgage Rate Update 8-8-14: Trends & Projections

By Jason E. Gordon

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

August 08, 2014 05:26 AM

Geopolitical events continue to drive Mortgage Backed Securities (MBS) today. US airstrikes in Iraq caused MBS prices to rise. Reports that Russia may be willing to negotiate with Ukraine caused a brief decline in MBS, but Investors were skeptical about the offer (causing MBSA to quickly turn upward). Second Quarter productivity was 2.5%, well above the consensus of 1.5%, but the First Quarter data was revised lower from -3.2% to -4.7%.

Compared to yesterday's closing, the market has opened with a 0.250% - 0.375% IMPROVEMENT for the Points/Credits associated with any given 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 8-8-2014 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 an IMPROVEMENT to pricing. Thursday's IMPROVEMENT netted a change of 21 basis points (bps).

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

Lowest Mortgage Rates in San Diego - www.GordonMortgage.com

The following chart summarizes todays market activity:

Lowest Mortgage Rates in 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.

Lowest Mortgage Rates in San Diego - www.GordonMortgage.com

Market Commentary (Neil Trenerry)

FNMA - Month Aug

Cpn 3.0 Chg 0.0781 Bid 99.00000

Cpn 3.5 Chg 0.0625 Bid 102.71875

Cpn 4.0 Chg 0.1094 Bid 105.85938

Treasury

UST 5 YR Chg 0.0703 Bid 100.21094 Yield 1.5810

UST 10 YR Chg 0.1250 Bid 100.32813 Yield 2.3950

UST 30 YR Chg 0.0781 Bid 103.03125 Yield 3.2160

Currency

Euro Bid 1.3386 Chg 0.0024

Pound Bid 1.6796 Chg -0.0040

Yen Bid 101.920 Chg -0.160

Light Crude

Last 97.62

Key Economic Data:

Labor costs for Q2: Actual 0.6%, Consensus 1.4%, last 5.7%, Revised 11.8%.

Productivity for Q2: Actual 2.5%, Consensus 1.5%, Last -3.2%, revised -4.5%.

7:00: Wholesale for Jun

Inventories: Consensus 0.6%, Last 0.5%.

Sales: Consensus 0.5%, Last 0.7%.

7:30: ECRI weekly Index: Last 135.5.

Advice:

Government bonds surged around the world as investors sought the safest assets after President Barack Obama authorized U.S. air strikes in Iraq. Treasuries rallied, pushing benchmark yields to the lowest level in more than a year, while those on higher-rated European securities dropped to records. Stock declines and outflows from junk-rated corporate bonds accelerated the safety bid. The escalation in Iraq added to geopolitical tensions in Ukraine and Gaza. The conflicts are increasing risks to growth, European

Central Bank President Mario Draghi said yesterday. The latest trigger has been the U.S. decision on the air strikes on Iraq, said Salman Ahmed, a London-based global strategist at Lombard Odier Investment Managers, part of Lombard Odier Group, which manages $207 billion. Its coming on top of a steady chain of negative news flow. In Ukraine, there is a clear escalation and thats what the market is pricing in. This is going to get worse before it gets better, Ahmed said. The U.S. 10-year yield fell five basis points, or 0.05

percentage point, to 2.37 percent at 6:55 a.m. New York time, according to Bloomberg Bond Trader data. The 2.5 percent note due in May 2024 rose 13/32, or $4.06 per $1,000 face amount, to 101 5/32. The rate reached 2.35 percent, the least since June 20, 2013.

Lombard Odiers Ahmed recommends being long Treasuries for coming days until clarity emerges. A long position is a bet an asset will rise.

My position on MBS:

Short term stays 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)

Your borrowers will benifet today by our bombing of Iraq. I dont have a better way to say that. We did have other bond friendly news, but the situation in Iraq caused the Gap up opening and we are not above the trading range.

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) Certified Mortgage Coach (CMC), and Certified Military Housing Specialist (CMHS), 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.CrossApproval.com or more information.

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