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San Diego Mortgage Rate Activity This Past Week, They Can Go Higher

By
Mortgage and Lending with Caliber Home Loans NMLS#284800

San Diego Mortgage Rate Activity For The Week Ending September 6th – Another week of volatility, capped off by a weaker than expected jobs report. On Thursday, we saw rates hit 2 year highs, only to come back down a little on Friday.

Here is why according to MBSQuoteline: “A lack of US military action in Syria caused investors to reverse last week's safety trade, while mixed economic data was roughly neutral. As a result, mortgage rates ended the week higher.

Since Fed officials have tied future policy changes to the performance of the economy, investors have reacted strongly to incoming economic data. Nearly all of the data released ahead of Friday's Employment report was strong. The ISM Manufacturing and ISM Services data rose to multi-year highs. Construction Spending posted solid gains. Jobless Claims remained close to five-year lows. Rates On The Rise

The Fed's Beige Book reported that economic growth remained healthy. In short, all signs pointed to a clear path for the Fed to begin to slow the pace of its bond purchases.

The final, and biggest, piece of the puzzle broke the pattern, however. Friday's highly anticipated Employment report fell short of expectations in nearly every area. This was bad news for the economy, but it was favorable for mortgage rates.

Against a consensus forecast of 175K, the economy added 169K jobs in August, but the figures from prior months were revised lower by 74K. The Unemployment Rate unexpectedly declined from 7.4% to 7.3%, the lowest level since December 2008.

Digging deeper, though, the details revealed that the decline was entirely due to people dropping out of the labor force rather than job gains. The labor force participation rate (the percentage of people able to work who are working or are looking for work) dropped to the lowest level since 1978. The Employment report caused investors to question whether the Fed will begin to taper its bond purchase program at its next meeting.”

If you ask around the water cooler at various San Diego mortgage companies, the general consensus is that “rates are very capable of going higher” and hoping for a significant dip is wishful thinking. Homebuyers currently in escrow are taking a big risk if floating their rate. Why gamble?

Looking to purchase or refinance residential property in San Diego or other parts of California? Contact your San Diego mortgage expert Kevin Kueneke today by calling 760-500-1919 or click HERE for a FREE consultation.

Posted by

 Kevin Kueneke, NMLS # 284800
San Diego County Mortgage Specialist
VA Mortgage Loan Specialist | FHA Mortgage Loan Specialist
Direct Lender | Mortgage Banker
Phone 760-500-1919 | Fax 619-419-2324

Visit My Website: kevinkloans.com 

Mann Mortgage LLC | NMLS #2550
11230 Sorrento Valley Road Suite 225| San Diego CA 92121

Comments (9)

Jason E. Gordon
CMG Mortgage, San Diego, CA - San Diego, CA
Sr Loan Officer, CMA, CMPS, CDLP, CDRE, RCSD, CDPE

I sure wish you were mistaken about these rate trends Bud, but I completely share your sentiments. Nice job KK.

Sep 07, 2013 07:14 AM
Edward & Celia Maddox
The Celtic Connection Realty - Queen Creek, AZ
EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD

Even though they have gone up recently, these are still fantastic rates when you look back.

Sep 07, 2013 07:52 AM
Kevin Kueneke
Caliber Home Loans - Encinitas, CA
San Diego Mortgage Banker

Hey Gordo - thanks my friend.  True, I wish the rate trend was not what it is too, but we have been spoiled for quite some time now.  Super important for potential buyers to stay in touch with their lender and know what they qualify for TODAY as that number could be very different from just a couple of months ago. 

Edward and Celia - I remember double digit 30 year fixed rates for A++ borrowers, and it is pretty amazing that rates have been less than half of that for a while.  Thank you for the comment.

Sep 07, 2013 09:39 AM
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

The unemployment rates always baffles me.. as you point out "Digging deeper, though, the details revealed that the decline was entirely due to people dropping out of the labor force rather than job gains."  I agree that with all the uncertainty in the world it is most likely a good time to lock.

Sep 07, 2013 11:51 AM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Let's hope they go higher than higher. :)

Sep 07, 2013 01:53 PM
Yvette Chisholm
Long & Foster Real Estate, Inc. - Rockville, MD
Associate Broker - Rockville, MD 301-758-9500

Everyone believes they are going higher, what are the buyers waiting for?   This is a great time to buy a house!   The overall cost of the house will be so much lower at today's interest rates than if they go up.   If they go back down, the buyer can refinance, if they go up - then they can buy a smaller house further away from where they want to be.

Sep 08, 2013 01:27 AM
Kevin Kueneke
Caliber Home Loans - Encinitas, CA
San Diego Mortgage Banker

Joan - I agree, lock when you can.  Why take the risk of your rate increasing when that is the obvious trend.  One bad day, especially these days, can mean an increase of 0.25% to 0.5% in rate.

Laura - but not too high...

Yvette - in San Diego we are still seeing prices go up even with the increase in rates.  Some buyers just need to lose out on a few homes before they realize the importance of putting their best foot forward.

Thanks for the comments.

 

 

 

Sep 08, 2013 04:39 AM
Les & Sarah Oswald
Realty One Group - Eastvale, CA
Broker, Realtor and Investor

Kevin,

Rates are definitely increasing, however, they are still a great deal of the century. Buyers should just lock the rates and not gamble on their future.

Sep 08, 2013 06:00 AM
Kevin Kueneke
Caliber Home Loans - Encinitas, CA
San Diego Mortgage Banker

Sarah and Lester - so true! 

Sep 08, 2013 06:40 AM