Tough day in the market today as we lost a total of 27 basis points.
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 nearly 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!
The following information is current as of Wednesday 2-27-2013 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 a WORSENINGto pricing (and will typically warrant a pricing adjustment by most Lenders). Tuesday's WORSENINGnetted a change of 3 basis points (bps).
(hint: upward activity is good, downward activity is bad)
The following chart shows a summary of today's 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 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):
2.5 Coupon: Open 99.9541 Change 0.2813
3.0 Coupon: Open 103.7031 Change 0.2188
3.5 Coupon: Open 105.7813 Change 0.1406
5 Year: Open 99.9688 Change 0.0000 Yield 0.7560
10 Year: Open 101.3750 Change 0.3438 Yield 1.8480
30 Year: Open 101.7031 Change 0.8438 Yield 3.0380
Key Economic Data
EUR/USD: Open 1.3080 Change 0.0020
GBP/USD: Open 1.5160 Change 0.0037
USD/JPY: Open 91.360 Change -0.610
Oil: Open 92.43
Key Economic Data:
Build permits for Jan: Actual 0.904m, Last 0.925m.
Index: Actual 753.0, Last 782.4.
Purchase: Actual 182.2, Last 192.1.
Refinance: Actual 4105.8, Last 4244.6.
30-yr Rate: Actual 3.77%, Last 3.78%.
Durable Goods for Jan
Index: Actual -5.2% Consensus -4.4%, Last 4.3%.
Ex-transport: Actual 1.9%, Consensus 0.2%, Last 1.0%.
Ex-defense: Actual -0.4%, Consensus -0.2%, Last 0.9%.
7:00: Pending home sales index for Jan: Last 101.7.
Orders for U.S. durable goods excluding transportation gear climbed in January by the most in a year, indicating business investment is holding up. Bookings for equipment meant to last at least three years minus demand for things such as aircraft, which is often volatile, climbed 1.9%, exceeding the median forecast of economists surveyed by Bloomberg and the most since December 2011, Commerce Department data showed today in Washington. Total orders dropped more than projected, reflecting the biggest slump in defense bookings in a decade. Healing overseas markets, sustained demand for automobiles and leaner inventories are combining to stabilize manufacturing beyond the monthly swings in aircraft orders. Further strides in the industry combined with a rebounding housing market would support Federal Reserve Chairman Ben S. Bernankes view that the economy will pick up after cooling at the end of 2012. Globally, sentiment measures from the factory sector seem to have strengthened, Mike Englund, chief economist at Action Economics LLC in Boulder, Colorado, said before the report. In the U.S., we will see continued growth in the equipment sector. Total orders slumped 5.2%, the first decline since August. The median forecast of 78 economists surveyed by Bloomberg projected a 4.8% decrease. Estimates ranged from a decline of 8.3% to a gain of 3%. Last months drop followed a 3.7% gain in December that was initially reported as 4.3%.
Mixed news but mostly harmful to bonds. What will offset the positive spark we see in our economy, is the UK recession, the Euro uncertainty and all of our ridicules "Cliff" discussions and sequestor fears. All real...and all posing tremendous economic risk. So yes, I am long-tern bullish on rates...BUT, I am short term nervous. THis is the top of a many month old downward channel. We promised ourselves we'd sell (Lock) up here. We knew we would get here, we just did not think it would all happen in one trading day. How we got here is not important. We are still sitting on what technically appears to be the top of the channel. Do you feel lucky today?
Market Commentary (Bill Fisher)
I just have to indulge in a bit of Told-you-so, one of lifes cheap, ephemeral thrills. The sales of newly-constructed homes are up 28.9% year-over-year as of mid-January. The number of new homes being built is climbing by 20% over the number being built a year ago.
It took longer than I thought it would, but- told you so.
But then, I told you so largely because many of the nations finest investors have long been buying up buildable land and pushing up the value of shares of builder stocks; not to mention elevating the shares of home-related firms like Home Depot. Very soon, most analysts will tell us theyve been saying this would happen for months and months. And many have.
But there are others who have had severe doubts, and still do. There are still those who are sure that the shadow market of homes facing likely foreclosures will pull the rug from under any advances in any real estate sector. So far, theyve been incorrect. The number of foreclosure starts has dwindled for months; the number of short sales has climbed; and notably, the number of homeowners whose homes have gained in value, allowing them to refinance and to sell, has grown significantly.
Does this mean the future is hunky-dory in every respect? Of course not.
Will foreclosures disappear magically over the coming years? No, they will remain a problem for many years to comebut probably not as severe a problem as many grim-faced economists have been forecasting.
What I want to emphasize just now is the likelihood that the real estate market is going through a radical change, and that it doesnt seem to be offering up an easily recognizable recovery. And probably wont.
Anyone who has been around the real estate business for a long time has come to recognize that exciting time when a real estate market begins to pull itself out of a slump. Price appreciation begins to accelerate, sometimes at dizzying speeds. And importantly there is a fairly orderly process of selling (a ladder recovery) in which first-time buyers gobble up the entry-level homes, and those sellers can then buy up into the next level of homes, and those who buy up still higher, and so forth, benefiting the whole market.
We havent really been seeing this. Though first-time buyers have been somewhat active in this market, they have too often been outbid by investors, many of whom make their purchases with cash. Further, the real estate industry is discovering the peril of student loans that take the total debt load of a potential young buying above the 43% debt-to-income threshold now being used by lenders.
But builders are turning these problems to their benefit. They are funneling buyers into government programs that make it possible to buy with low down payments and slightly shaky debt records. They are creating their own mortgage lending companies that can work effectively with entry-level buyers. Sellers of existing homes cant compete with such services.
So it isnt just exciting new home models and discounted pricing (which, in fact, builders arent having to utilize at all) that are driving buyers to new homes. It is the greater ease of purchase. And, with prices that may be 37% higher than those of comparable existing homes, newly-constructed homes arent attracting investors. Theyre attracting personal residence buyers.
As a result, instead of seeing more cash purchases, were seeing more FHA and VA loans and more home purchases financed by mortgage companies associated with the builders. And, to be honest, regarding more expensive comparable new homes outselling existing homes, I never told you soand I am at a loss to predict how this will all play out. But I am certain it will inspire and enforce many changes in the ways homes are marketed and financed in the near future.
Trusted Industry Advisor
The above information was compiled and distributed by San Diego Residential Mortgage Specialist, Jason E Gordon in an effort to provide transparency regarding true mortgage rate activity and market guidance to consumers and professionals interested in this activity.
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