After gains on Friday, Mortgage Backed Securities have moved a little lower this morning. No economic data will be released today. Federal Chair Yellen will be speaking later this morning.
Compared to Wednesday'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 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 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!
The following information is current as of Monday 6-6-2016 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 Friday with an IMPROVEMENT to pricing. Friday's WORSENING netted a change of 6 basis points (bps).
(Note: Upward activity on these charts is GOOD, downward activity is BAD)
The following chart summarizes today's market activity:
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 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.
Beware of relying on Interest Rate Quotes like the one above!
Being opaque has been paying off for Janet Yellen. Thats one reason not to expect razor-sharp clarity as she speaks in Philadelphia later on Monday. During a May 27 appearance, the Federal Reserve Chair neither signaled nor ruled out a June rate move. As a result, she wont have to backtrack after a comprehensively dismal payrolls report last week led markets to doubt whether the Fed will raise rates this year, let alone this month. Yellen may need to update her tone slightly in response to
renewed labor market uncertainty, perhaps softening or further qualifying her May 27 statement that an increase will probably be appropriate in coming months. Still, economists and strategists say its unlikely that shell give a more definitive
timeline on when to expect the second hike in a decade. Were going to get a vague promise of future rate hikes that does not specify a date, said Guy Lebas, chief fixed- income strategist at Janney Montgomery Scott LLC in Philadelphia, who expects a September increase. You cant claim data dependence, have the most recent data be what it was, and still take upward rate action. In the weeks leading up to the employment report Friday, several Fed officials had signaled that they were in favor of a rate increase in coming months. Markets were increasingly pricing in a hike at either the Feds June 14-15 or July 26-27 meeting as a result, but that reversed following the latest jobs data. The Labor Department report showed that America added just 38,000 jobs in May, the worst reading since 2010. Unemployment declined to 4.7 percent as people left the work force and labor force participation declined. The case for July is no longer as clear, economists Michelle Girard and Kevin Cummins at RBS Securities Inc. wrote following the jobs data. They noted they have yet to finalize their rate call, which is currently for September but had been leaning toward July before the jobs numbers. We will wait to see what Yellen says Monday. Yellen is the last scheduled Fed official to speak publicly before the quiet period Fed officials typically observe the week before a Federal Open Market Committee meeting. Shell give remarks at the World Affairs Council in Philadelphia at 12:30 p.m. local time, then will attend a roundtable discussion at the West Philadelphia Skills Initiative starting at 2 p.m. The appearances give her a chance to talk July back onto the table by signaling that the June data may have been a blip.
Alternatively, she could push expectations back further by emphasizing the negative developments. Shell likely do neither. The last thing Yellen wants to do is talk herself into a corner, said Gennadiy Goldberg, an interest-rate strategist at TD Securities LLC in New York, who expects Yellen to stick to her call for an increase in coming months while emphasizing that it depends on data holding up. That was the beauty of Yellens recent remarks -- it was enough to put the markets on
notice, without painting herself into a corner if the data should sour. Girard and Cummins at RBS expect Yellen to repeat her prior comments -- hardly a precise signal. She will stick to the script that a rate hike in coming months would be appropriate
if things unfold as the Fed expects, which could mean June, July or September, they wrote.
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.
No news today but the DOW is up over 100 points which is putting some pressre on bonds. We may try and close some of the massive gap up that was created by Friday's Non-farm payroll numbers, but I dont think we'll close it all and I dont think we will stay down once we do close it. I'm guessing we will settle into a range that will look something like 102.40 to 102.90 for the next week or two, until some outside force moves up or down out of that range.
2016 Economic Forecast (Barry Habib)
Trusted Industry Advisor
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 and/or The TBWS Group.