Mortgage Rate Update 2-3-2016: Trends & Projections

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

It has been another volatile morning. Bonds have rallied while stocks are declining. The ADP estimate for private sector job growth in January was 205K, above the consensus of 190K.  Additionally, ISM Services came in below expectations.

Compared to Monday's closing, the market has opened with a 0.250 improvement 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 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 -

The Mortgage Street Smarts of where mortgage interest rates are going (and why):

The following information is current as of Wednesday 2-3-2016 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 Tuesday with an IMPROVMENT to pricing. Tuesday's IMPROVEMENT netted a change of 21 basis points (bps).

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

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The following chart summarizes today's market activity:

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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:

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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.

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 Beware of relying on Interest Rate Quotes like the one above!  


2016 Economic Forecast (Barry Habib)


Market Commentary (Neil Trennery)

Market Update
FNMA in 32s
Cpn 2.5 Chg 0.000 Bid 99.08+
Cpn 3.0 Chg -0.06+ Bid 102.032
Cpn 3.5 Chg -0.050 Bid 104.206
Cpn 4.0 Chg -0.032 Bid 106.233
Treasury in 32s
UST 5 YR Chg -0.036 Bid 100.126 Yield 1.2906
UST 10 YR Chg -0.092 Bid 103.092 Yield 1.8792
UST 30 YR Chg -0.256 Bid 106.046 Yield 2.6974

Bank Rates
Discount 1.00%
Fed Funds 0.50%
Prime 3.50%
Euro Bid 1.09692
Pound Bid 1.45455
Yen Bid 119.262

ADP Employment Change for Jan: 205k, Consensus 190k, Last 267k, Revised 257k.
7:00: ISM Services Index for Jan: Consensus 55.0, Last 55.3.

Companies hired 205,000 workers in January as the labor market continued to power past a growth slowdown and financial-market volatility. The increase in private employment last month followed a revised 267,000 gain in December that was more than previously reported, according to figures released Wednesday from the ADP Research Institute in Roseland, New Jersey. The median forecast of economists surveyed by Bloomberg called for a January advance of 195,000. Sustained hiring is a sign companies are optimistic that demand will improve after a fourth-quarter growth slowdown. Further gains in employment would provide a stronger base for a pickup in wage gains, which remain a much-awaited component of the labor market recovery. Job growth remains strong despite the turmoil in the global economy and financial markets, Mark Zandi, chief economist at Moodys Analytics Inc. in West Chester, Pennsylvania, said in a statement. Moodys produces the figures with ADP. Manufacturers and energy companies are reducing payrolls, but job gains across all other industries remain robust. Estimates in the Bloomberg survey ranged from 160,000 to 295,000. The prior months figure was previously reported as an
advance of 257,000.

My position on MBS:

Short term Stays Neutral.
Long term Stays Neutral.
With ADP coming in stronger than expected, considering going Short.

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)

We talked about a run up to 102.50 and it is upon us! This is a full on bull market for quality bonds and on full on bear market for stocks. It seems all that I predicted last year, is happening this year. Last year, all the silly talk about the FED raising rates kept the market in a numb and irrational state. When the FED finally acted and the market saw what we already knew (that being a so-what attitude), it began moving a more normal pattern. Today we had ADP beat expectations and ISM services miss expectations, but the market does not care either way, it wants to run. We may stall out at 102.50 to take a breather and let some profits fall from the table. If you have deals to lock, this is not a bad time to do so, ALthough I believe we have much farther to run, I am not sure how much more we will get today. The big news comes Friday!



Trusted Industry Advisor

Jason Gordon Mortgage -

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 or or more information.

Click here for daily mortgage interest rate updates and projections for San Diego's best mortgage interest rates

Comments (3)

David Alan Baker | Laveen & South Phoenix Realtor
Keller Williams Realty Phoenix - Laveen, AZ
Your local Expert

Thanks for sharing all this information.  See video of frank and barry there as well, did not watch it yet, but barry is usually really good.

Feb 03, 2016 03:19 AM
Jason E. Gordon
CMG Mortgage, San Diego, CA - San Diego, CA

Thanks for the comment David Baker Realtor - Laveen Homes for sale 

I'm a huge fan of Barry Habib. He's not only brilliant, but he has a very gifted talent of explaining the market in an easy to understand format. Good luck in AZ. We have a huge presence out there. Let me know if you ever need a local LO to assist with your clients.

Feb 03, 2016 03:22 AM