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Mortgage Rate Update 10-7-14: Trends & Projections

By Jason E. Gordon

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

October 07, 2014 06:17 AM

A decline in stocks has lifted Mortgage Backed Securities this morning. Invevstors are concerned about the pace of global economic growth, particularly in Europe. The JOLTS report came in just above expectations, and no further economic data wil be released today.

Compared to Friday's closing, the market has opened with a 0.125 - 0.250 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 Monday 10-7-2014 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 Monday with an IMPROVEMENT to pricing. Monday's IMPROVEMENT netted a change of 9 basis points (bps).

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

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

The following chart summarizes todays market activity: Best 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.

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

Market Commentary (Neil Trenerry)

FNMA - Month Aug

Cpn 3.0 Chg 0.0938 Bid 99.40625

Cpn 3.5 Chg 0.1094 Bid 102.92188

Cpn 4.0 Chg 0.0625 Bid 106.00000

Treasury

UST 5 YR Chg 0.1016 Bid 100.37500 Yield 1.6700

UST 10 YR Chg 0.2188 Bid 99.82813 Yield 2.3950

UST 30 YR Chg 0.4219 Bid 100.37500 Yield 3.1060

Currency

Euro Bid 1.2628 Chg -0.0023

Pound Bid 1.6094 Chg 0.0012

Yen Bid 108.270 Chg -0.520

Light Crude

Last 90.12

Key Economic Data:

ICSC Chain Stories

WW: Actual 0.1%, Last -0.2%.

YY: Actual 3.9%, Last 3.6%.

Redbook

MM: Actual -0.3%, Last -0.5%.

YY: Actual 5.4%, Last 4.3%.

7:00: JOLTS Job Openings for Aug: Last 4.67m.

7:00: IBD Economic Optimism for Oct: Last 45.2.

12:00: Consumer Credit for Aug: Consensus 20.00b, Last 26.01b.

Advice:

Treasury three-year notes rose, with yields approaching the lowest levels in a month, before the U.S. sells $27 billion of the debt as part of $61 billion in securities sales this week. U.S. benchmark 10-year notes gained before the Federal Reserve releases tomorrow the minutes of its September policy meeting in which it increased its median estimate for the federal funds rate. The current three-year note opened at the lowest repurchase rate of negative 1.5 percent as traders were willing to pay to borrow the most actively traded security in exchange for loaning cash for the notes. The Treasury is scheduled to sell $21 billion of 10-year debt tomorrow and $13 billion of 30-year bonds the next day. The better bid is because of the short base, said Thomas Tucci, managing director and head of Treasury trading in New York at CIBC World Markets Corp. Theres still demand. The marketplace as a whole is still underweight Treasuries. The U.S. 10-year yield dropped two basis points, or 0.02 percentage point, to 2.40 percent as of 9:02 a.m. New York time, according to Bloomberg Bond Trader data. The price of the 2.375 percent note due in August 2024 was at 99 3/4. The yield fell to 2.38 percent on Oct. 1, the lowest level since Sept. 4. The yield on the three-year notes to be sold today traded at 1.020 percent in pre-auction trading, down from 1.066 percent at the most recent sale on Sept. 9. The previous auction of the securities drew a bid-to-cover ratio of 3.17, compared with an average of 3.35 at the previous 10 auctions

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)

Holy Cow...we are again testing 103.00, which takes us back to the highest levels since last summer. We also now have the 10 year down to 2.38%. Both levels are very bullish and I like the picture. I continue to believe we will see a sub 2% 10 year bond, at least one more time. BUT..not quite yet. We will see a fairly significant correction, which will shake the tree and drop all the weak bond holders, before we see a longer-term move to lower yields. For now...I'd lock and not assume this is the big breakout. It could be, but breakouts are rare and not the best bets to make. Show your clients what has happened every time we've tested 103 and let them decide!

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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