OUCH! In the U.S., the first reading for the 3rd Quarter GDP was 1.5% which was slightly below the consensus of 1.6% (and down from 3.9% from Q2). The details of the report may reflect greater strength, however a decline in inventories held back 1.4% of growth during Q3 (meaning that GDP would have increased nearly 3.0% if inventory levels had simply held steady. Furthermore, Jobless Claims came in below forecasts.
Compared to Wednesday's closing, the market has opened with a 0.250 WORSENING to the Points/Credits associated with any given interest rate option.
This daily mortgage interest rate report is designed to provide Borrowers & Real Estate Professionals 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!
The Mortgage Street Smarts of where mortgage interest rates are going (and why):
The following information is current as of Thursday 10-29-2015 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 Wednesday with a SIGNIFICANT WORSENING to pricing. Wednesday's SIGNIFICANT WORSENING netted a change of 46 basis points (bps).
(Note: Upward activity on these charts is GOOD, downward activity is BAD)
The following chart summarizes todays market 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 scenario involving a 740+ credit score, 25% down payment, owner occupied, single family residence, with impound account, with a loan amount up to $417,000 to accompany this pricing.
It bears noting that this chart does not necessarily represent today's best mortgage rates.
Beware of relying on Interest Rate Quotes like the one above!
CLICK HERE TO READ ABOUT THE TRUTH BEHIND MORTGAGE QUOTES
Market Commentary (Neil Trenerry)
Market Update
FNMA
Cpn 2.5 Chg -0.05+ Bid 98.305
Cpn 3.0 Chg -0.040 Bid 101.042
Cpn 3.5 Chg -0.032 Bid 104.032
Cpn 4.0 Chg -0.030 Bid 106.12+
Treasury
UST 5 YR Chg -0.032 Bid 99.12+ Yield 1.5003
UST 10 YR Chg -0.034 Bid 99.000 Yield 2.1128
UST 30 YR Chg -0.164 Bid 99.12+ Yield 2.9050
Bank Rates
Discount 0.75%
Fed Funds 0.25%
Prime 3.25%
Currency
Euro Bid 1.09334
Pound Bid 1.52472
Yen Bid 121.026
News:
Unemployment
Initial Jobless Claims: Actual 260k, Consensus 265k, Last 259k.
Advance GDP for Q3: Actual 1.5%, Consensus 1.6%, Last 3.9%.
7:00: Pending New Home Sales: Consensus 1.0%, Last -1.4%.
Advice:
It just got a lot tougher for bond traders to rule out a Federal Reserve interest-rate increase in 2015. The Feds Wednesday statement validated the views of analysts at Goldman Sachs Group Inc. and BMO Capital Markets, who had raised concerns that investors were underestimating the chance of a liftoff by year-end. Policy makers kept the central banks target near zero and said they planned to assess whether to raise it when they meet next in December. The release prompted the biggest jump in two-year Treasury yields since March and pushed futures bets on a December Fed boost to the highest in a month. The extra yield investors demand to hold 30-year bonds instead of five-year notes dropped to the least in two months. The policy statement was very explicit in saying that the Federal Open Market Committee will consider raising rates in December, Ken Taubes, Pioneer Investment Management Inc.s Boston-based head of U.S. investments, wrote in a note. The Fed continues to see the U.S. economy growing at a moderate but steady pace. Traders see a 48 percent chance the central bank will raise its benchmark rate at its next meeting, according to futures data compiled by Bloomberg. Thats up from 37 percent in the minutes leading up to the Feds release. The calculation assumes the effective fed funds rate averages 0.375 percent after the first increase, compared with the current zero-to-0.25 percent target range. The U.S. two-year yield climbed one basis point, or 0.01
percentage point, to 0.72 percent as of 7:45 a.m. New York time, having risen eight basis points on Wednesday. The price of the 0.625 percent security due in September 2017 was at 99 26/32. Benchmark 10-year yields were little changed at 2.11
percent. The yield gap between five- and 30-year bonds slipped to as low as 139 basis points, the lowest since Aug. 31. Officials also removed from their statement a reference to global developments restraining economic activity. Its far more probable that theyre going to hike than not before the end of this year, said David Keeble, head of fixed-income strategy with Credit Agricole SA in New York. Keeble flagged the risk for Treasury bulls in a note before the meeting. Goldman Sachs analysts led by Francesco Garzarelli echoed the notion, saying the probability the market was assigning a December liftoff was too low. They give a 2015 Fed increase a 60 percent chance.
My position on MBS:
Short term Changes to Neutral.
Long term Stays Neutral.
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)
UGH! What a horrible sell off, all related to the FED strongly hinting that they may increase rates at the next meeting. Would you please just get it over with Janet? In my opinion, the market has already priced 300 bps or more into this increase. You've all heard the statement, "Buy on the Rumor and Sell on the News". Its true, by the time most things happen, the market has already seen it coming and have either bought or sold short, accordingly. I believe this chess game the fed must play the with market will be that each small increase in short term rates, will be answered by a bigger move down on long term rates. This may happen until short term rates have risen and long term rates have fallen, that two rates will be identical and the yeild curve will be flat or perhapes inverted. This has always led to recession. It's a concentric circle, which will lead the long term rates down further and the FED to begin easing the short term rates, until the yield curve is back to a healthy slop and the economy recovers.
I believe all of this keeps rates very low until 2017. Now, when rates do go up in 2017, it will be great news for all of us. The mellennials will be reaching peak buying ages and the economy should see some robust years and BIG homebuying. If mortgage rates go back to 5.5% and home sales go back up to a 1.25 trillion, we all win. For now, hang on as long as you can, this market will correct in the next few trading sessions.
Trusted Industry Advisor
The above information was compiled and distributed by San Diego Residential Mortgage Specialist, Jason 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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