Good bounceback day for rates yesterday, but how will the week finish? What can we expect from mortgage rates for the rest of the quarter? All Real Estate Professionals & Consumers are advised to stay informed about interest rates and learn THE TRUTH BEHIND MORTGAGE QUOTES to insure the best financial decisions are being made without the distraction of marketing gimmicks. Whether you're a newbee, market analyst (or somewhere in between), keep yourself informed of where mortgage interest rates are going (and why) by subscribing to this complimentary daily update.
The Mortgage Street Smarts of where mortgage interest rates are going (and why):
The following information is current as of Friday 3-16-2012 and will help you understand todays 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 (and will typically warrant a pricing adjustment by most Lenders). Thursday's IMPROVEMENT resulted in a change of 31 basis points (bps).
(hint: upward activity is good, downward activity is bad)
The following chart shows the market activity for today:
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
Analyst: Lou Barnes
Long-term Treasurys and mortgage rates at last broke out of a half-year-long trading range centered on 2.00% for the 10-year T-note, and 4.00% for mortgages.
Upward: 10s to 2.33% today, lowest-fee mortgages pushing 4.25%. Verdict first, then evidence: this move is not the start of a bigger one, and is likely to reverse.
Silly things have pushed this rate run to extreme: markets oooo'ed and ahhhh'ed at successful stress tests of 15 of 19 too-big-to-fail banks (the failure of four would crater our system, again); and inflation knee-jerks flipped at today's 0.4% February CPI reading (the core at 0.1% is fine, gas prices compressing other spending and prices).
10-year Ts had for six months stayed tight to 2.00% because the Fed began to buy long Treasurys in Operation Twist, because Europe was on the edge of its own Lehman moment, and last fall the US appeared near new recession. Twist is still underway (and you can bet the Fed hates this mortgage rate rise), but a European banking collapse and new US recession are off the table.
One year ago the 10-year paid 3.75%, and mortgages cost just over 5.00%. The magnitude of European futility and risk came clear last August, 10s in one swell foop to 2.00%. We will have to wait for memoirs, but in early December the European banking system was only days away from failure, intercepted by the ECB's December 8 Long Term Refinancing Operation, then insurance taken by LTRO2 last month.
Those last fall predicting US recession, the respected ECRI, especially, were dead wrong. But, have we now entered the even-longer-predicted self-sustaining recovery? No, but closer. There is a Churchill quote for every occasion, this in November 1942 after Britain's first victory of WW II, El Alamein: "Now is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."
Several signals say that we are not yet in self-sustenance, the most important at the Fed. Many over-read a word in Wednesday's post-meeting minutes: the substitution of "moderate" for "modest" as the modifier for economic growth. The replacement is accurate, but… modest. More important, the Fed stuck verbatim to its commitment to "exceptionally low levels for the federal funds rate at least through late 2014."
Another marker: the small-business surveyor, NFIB, found another small improvement in its index of optimism. Although rising to the second-best level since 2007, it is no better than one year ago, and still below the bottom of every business downturn since 1982. The NFIB did confirm some small-biz participation in hiring.
And Europe is anything but over. Its banks protected, it has become a slow-roller, waiting to see what Club Med depressions do to local political stability and overall unity. The best long-term hope: an orderly demise of the euro, then short global recession.
As many readers know, Greg Smith resigned from Goldman this week, and the NYT printed his resignation -- a condemnation for the ages. A prior chief of Goldman, the legendary Johnny Whitehead in 1970 issued these 10 points as a guide to the firm:
1. Don’t waste your time going after business you don’t really want.
2. The boss usually decides -- not the assistant treasurer. Do you know the boss?
3. It is just as easy to get a first-rate piece of business as a second-rate one.
4. You never learn anything when you’re talking.
5. The client’s objective is more important than yours.
6. The respect of one person is worth more than an acquaintance with 100 people.
7. When there’s business to be found, go out and get it!
8. Important people like to deal with other important people. Are you one?
9. There’s nothing worse than an unhappy client.
10. If you get the business, it’s up to you to see that it’s well-handled.
Some on today's Wall Street regard this guide as quaint. The tragedy, hardly limited to Goldman people: the vastly larger Street mob in Armani who have no conceptual framework with which to comprehend Whitehead's thinking at all.
Trusted Industry Advisor
The above information was compiled and distributed by San Diego Residential Mortgage Specialist, Jason E Gordon. 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.jasonegordon.com or www.ApprovingSD.com or more information.
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