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Mortgage Rate Update 12-15-14: Trends & Projections

By Jason E. Gordon

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

December 15, 2014 01:30 AM

Mortgage Backed Securities have given back some of last week's gains this morning. Mixed early economic data was roughly neutral. November industrial production rose from October, well above the consensus for increase. However, the Empire State regional manufactuing index declined below the consensus, and to the lowest level since January 2013. The NAHB Housing Survey came in just below expectations.

Compared to yesterday's closing, the market has opened with a 0.125 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 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 12-15-2014 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 Friday with a SIGNIFICANT WORSENING to pricing. Monday's SIGNIFICANT WORSENING netted a change of 27 basis points (bps).

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

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The following chart summarizes todays market activity:

Jason Gordon Mortgage San Diego

The following chart shows market activity over the past 10 days (hint: green is good, red is bad)

Jason Gordon Mortgage San Diego

The following chart shows market activity over the past 1 month:

Jason Gordon Mortgage San Diego

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 (Neil Trenerry)

FNMA - Month Jan

Cpn 3.0 Chg -0.2344 Bid 101.09375

Cpn 3.5 Chg -0.1875 Bid 104.17188

Cpn 4.0 Chg -0.1250 Bid 106.57813

Treasury

UST 5 YR Chg -0.2891 Bid 99.64844 Yield 1.5740

UST 10 YR Chg -0.4063 Bid 101.07813 Yield 2.1290

UST 30 YR Chg -0.5938 Bid 104.67188 Yield 2.7690

Currency

Euro Bid 1.2467 Chg -0.0032

Pound Bid 1.5654 Chg -0.0063

Yen Bid 118.640 Chg -0.150

Light Crude

Last 57.66

Key Economic Data:

NY Fed Manufacturing for Dec: Actual -3.58i, Consensus 12.40i, Last 10.16i.

Industrial Output for Nov: Actual 1.3%, Consensus 0.7%, Last -0.1%.

Capacity Utilization for Nov: Actual 80.1%, Consensus 79.3%, Last 78.9%.

Manufacturing Output for Nov: Actual 1.1%, Consensus 0.5%, Last 0.2%.

7:00: NAHB Housing Index for Dec: Consensus 58i, Last 58i.

Advice:

Treasury 10-year notes fell for the first time in six days before the Federal Reserve meets to review its policy stance on the timeframe for an interest-rate increase. The decline pushed up yields on the securities from their lowest close in 18 months as policy makers consider whether to retain a pledge to keep rates low for a considerable time after they ended monthly bond-buying in October. U.S. debt also came under pressure as crude oil was little changed after falling to five-year lows. The difference between the yields on two-year and 30-year debt, known as the yield curve, narrowed to the least in almost six years. The Fed takes precedent, said Michael Franzese, senior vice president of fixed-income trading at ED&F Man Capital Markets in New York. The central bank may leave considerable time in there and tell you that it could be removed in the next couple of meetings, and that they will begin the process of raising rates in May or June. The benchmark U.S. 10-year yield rose two basis points, or 0.02 percentage point, to 2.11 percent at 8:52 a.m. in New York, according to Bloomberg Bond Trader data. The 2.25 percent note due November 2024 dropped 7/32, or $2.19 per $1,000 face amount, to 101 1/4. The 2.08 percent close on Dec. 12 was the lowest since June 2013..

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.

Market Commentary (Dan Rawitch)

http://www.ratewatch.com/ratewatchnow.html

We still have not managed the full breakout that I am looking for, but we are doing a great job of staying in the upward channel. This 104.30ish resistance level is formidable and if we dont break through in the next couple of attempts, it could fatigue and spook the buyers, thus turning them to sellers. We should get some help today due to the miss on the NAHB housing number and Empire Manufacturing. Later This week we will get both housing starts and CPI. THose numbers should provide the market the knowledge it needs, to either break through or bounce off the top. Lets hope for a break through.

Trusted Industry Advisor

Jason Gordon Mortgage - www.GordonMortgage.com

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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