Below is a simple lesson on how to read the charts associated with the Mortgage Rate Updates & Projections reports which can be found at www.JasonGordon.info nearly every business day. If you are pursuing a mortgage (or helping to refer someone in need of a mortgage), it is highly recommended that you learn The Truth Behind Mortgage Rates (to understand the terms "Mortgage Pricing") as well as The Truth Behind Mortgage Quotes (to understand how to spot marketing gimmicks used by some Mortgage Professionals when quoting you Mortgage Pricing).
Lesson #1: Understanding Daily Charts
The first charts which appear on this report are associated with reading the Daily Activity of mortgage pricing. Since these charts reflect bond activity, please note that upward directions on the charts are actually good for mortgage pricing (since bonds & rates move in opposite directions).
Above is an example of a GOOD DAY for Mortgage Pricing as the activity ended up HIGHER than the pink horizontal line. This particular day would likely result in a LOWER COST or HIGHER LENDER CREDIT of any given mortgage rate quote (both of which would be MORE FAVORABLE for the Borrower).
Above is an example of a BAD DAY for Mortgage Pricing as the activity ended up LOWER than the pink horizontal line. This particular day would likely result in a HIGHER COST or LOWER LENDER CREDIT of any given mortgage rate quote (both of which would be LESS FAVORABLE for the Borrower).
Lesson #2: Understanding Historical Charts and "Candlesticks"
In the charts below, we use "Candlesticks" to summarize the activity of any given day. Quite simply, the facts to know are as follows:
Green = GOOD NEWS for Mortgage Pricing (for the Consumer)
Red = BAD NEWS for Mortgage Pricing (for the Consumer)
The LARGER THE CANDLESTICK, the more significant the activity was in that direction, on that day
The HIGHER ON THE CHART the Candlestick appears, the MORE FAVORABLE it is for the Consumer,
The LOWER ON THE CHART the candlestick appears, the LESS FAVORABLE it is for the Consumer
In some cases, the Candlesticks appear to have a "wick" above and/or below them. The "wick" refers to the maximum point (up and/or down) pricing reached on that given day. When there is a wick present, it means the market did not close that day at the most extreme point it reached amidst that day.
With the above facts in mind, below is a 10 Day Summary of the Market, using the Candlesticks:
Lesson #3: A Broader Overview Using a 1 Month Recap
The chart below displays a couple of very distinctive market trends. Early in this reporting, we have a couple of fantastic days for the Consumer. Sadly however, this trend was significantly reversed with a downward trend which culminated in 2 very lousy days for the Consumer before turning around.
If you were shopping for a loan (much less locking in a rate), you could see how critical it is to know where the market is when making such an important decision!
Below is another view of how the landscape of mortgage pricing can change in such a short amount of time. If you were initially quoted a rate early in the "yellow" period, you can imagine how frustrated you would be if you attempted to lock in your pricing during the "blue" period.
Did you know that you can comb through the archives of these Mortgage Rate Updates by scrolling to the bottom of the page at www.JasonGordon.info (to help display transparency of Rate Activity)?
Lesson #4: Comparing These Trends with an Actual Rate Sheet
To help tie everything together, each day a Sample Rate Sheet is posted. Please note that this particular rate sheet is only posted for visual purposes (so you can assess how these trends each day impacted rates with one particular Lender). This particular Lender was selected due to the fact that their sample rate sheets are created in an easy-to-read format. It bears noting that this particular Lender charges 1 Point for the posted rates (and is rarely the best option to pursue on any given day). For "real quotes" you are welcome to contact me on any given day at the phone/email/website below.
Lesson #5: Market Commentary
Lastly, different Market Analysts are often quoted to represent their expert opinion as to the direction of the market, and often predictions of where the market is heading. It bears noting that this commentary is "copied & pasted" and does not always accurately reflect where the market is going. In all my years of analysis, I have yet to find anyone who is always correct in their predictions.