San Diego Mortgage rates have been holding in a sideways pattern to start off  this shortened week and didn’t react much to the NAHB/Wells Fargo Housing Market Index which showed a three point decline in the West echoing continued concerns about the poor job market and large number of foreclosed homes for sale.  This builder survey rates traffic of prospective home buyers, current sales and expectations of future sales and scores for each component are then used to calculate the index.  Any number over 50 indicates that more builders view sales conditions as good than poor. In January the West region index fell to 16, three points lower than December of 09 but up from a score of 5 in January of 09.

National Association of Home Builders Chief Economist David Crowe had this to say:

“Home buying conditions have rarely been as good as they are right now, but consumers are still waiting to see significant positive signs of improvement in employment and confidence, and this is slowing buyers’ return to the market” …  “Meanwhile, competition from foreclosed homes is also severely impacting new-home sales. That said, expected improvement in the job market this spring will help propel the housing recovery as we head into the prime home buying season.”

For the week ahead,  tomorrow  data picks up with the weekly Mortgage Bankers Associations Application Index followed by Housing Starts which will give market participants a look into the strength of the housing sector.   We also get a reading on inflation with the Producer Price index which tends to be a big mover of San Diego mortgage rates. Thursday brings us the weekly jobless claims and on Friday we have no economic reports.

My wholesale lenders issued rate sheets that were unchanged from Friday. The 30 fixed rate mortgage remains in  the 4.875% to 5.125% range for well qualified borrowers.  Check back frequently for news that affects San Diego mortgage rates!

San Diego mortgage rates moved slightly higher last week despite worse than expected employment data. There are no reports on the economic calendar today but the week ahead will have some items of interest that may move rates.  To help readers make sense of these reports and how they affect rates a good rule of thumb is that worse than expected economic data benefits fixed income securities like bonds and mortgage backed securities (MBS) while better than expected data benefits the stock market.

Throughout the week the government will auction @$75 Billion in new debt.  Continued strong demand for our nation’s debt will help to keep rates low! On Wednesday the Mortgage Banker’s Association will give us a look at their mortgage application index. This will help us gauge demand in the housing sector since the report distinguishes between refinance and home purchase applications.  The 3 reports most likely to move San Diego Mortgage rates are the retail sales and jobless claims reports on Thursday and the consumer price index on Friday.  Our economy is based on consumer spending and both retail sales and jobless claims speak directly to that factor. Higher retail sales and lower jobless claims means more Americans are working and spending!  On Friday the consumer price index will help gauge inflation which is perhaps the #1 factor the Fed uses when setting interest rates. If consumer prices are higher than expected the government will raise rates to slow things down.

My wholesale lenders issued rate sheets that were basically unchanged from Friday.  The 30 fixed rate is  in the 4.875% to 5.125% range for well qualified borrowers.  Well qualified assumes a credit score of 740, a loan to value at 80%  and one point loan origination.  You may elect to pay less in upfront fees, but you will have to accept a higher interest rate. Check back tomorrow for news affecting San Diego mortgage rates!

San Diego mortgage rates remain unchanged after the December employment report announced a loss of 85,000 jobs. This was much worse than expected and put the national unemployment rate at 10%.  This was in contrast to November of 2009 where 4000 jobs were created and that was the first month since December of 2007 that we actually gained jobs vs. losing jobs.  Ironically, bad news in the labor market translates to good news for San Diego Mortgage rates. Less jobs means less consumer spending which in turn keeps price inflation in check. This is good for rates because the first thing the Fed does when they fear inflation is jack up rates to slow things down.

So what can we take from this report? Although the economy has stabilized we are not out of the woods and it is too soon to say we are in recovery. My heart goes out to the families affected by December’s loss of 85000 jobs but had we seen a better than expected report it may have put pressure on the Fed to raise rates over inflation worries. When the Fed raises rates it leads to higher consumer costs,  lower consumer spending and a further slow down in our economic recovery.

Most of my wholesale lender issued rate sheets unchanged from yesterday. The par 30 year fixed rate is in the 5.0% – 5.125% range for highly qualified borrowers. Highly qualified assumes a credit score of 740, loan to value of 80% and pay one point loan origination.   Have a great weekend and check back Monday for updates on San Diego Mortgage rates.

San Diego mortgage are in a sideways pattern this week ahead of tomorrow’s release of non farm payroll numbers. Inflation remains the top concern of economists and mortgage backed securities traders.  The jobless claims report came out today showing first time unemployment claims rising by a modest .25% which was better than expected and those who continued to receive benefits fell by 165,000. There are still 5.5 million people out of work and collecting benefits so be thankful if your are one of the fortunate ones with a stable job!

Most of my wholesale lender issued rate sheets that were slightly worse from yesterday. The par 30 year fixed rate is in the 5.0% – 5.125% range for highly qualified borrowers. Highly qualified assumes a credit score of 740, loan to value of 80% and pay one point loan origination.   Check back tomorrow to see how the payroll numbers affect San Diego Mortgage rates.

To better understand where San Diego mortgage rates are headed we have to look at various factors in the economy. Pending home sales is one of those key factors and the data released today by the National Association of Realtors which covers pending sales in November 2009 reported a national average decline of 16% when compared to October 2009. The silver lining for those of us in San Diego is that regionally the West was only down 2.7% from October to November of 2009 and pending sales were 21.4% higher than November of 2008.

Seasonally this time of year is slow but we can expect an increase in activity in early spring as people rush to take advantage of the expanded home buyer tax credit. This tax credit has been key in keeping San Diego mortgage rates low.  In order to take advantage of the home buyer tax credit you have to be under contract by 04/30/2010 and close by 06/30/2010, be either a first time home buyer or a repeat buyer who owned their previous residence for at least 5 years. First timers get a credit of up to $8000 and repeat buyers get a credit of up to $6500.  One thing to note is that repeat buyers do not have to sell their current residence so long as they plan to occupy the newly acquired property as their primary residence.

Many of my wholesale lenders have issued rate sheet price improvements today. The 30 year fixed is back down to the 4.875% -  5.125% range for well qualified borrowers.  Well qualified assumes a credit score of 740 or higher, loan to value at 80% or less and 1% loan origination fee.  Check back frequently for news affecting San Diego Mortgage rates.

Today marks the first Monday of the new year and San Diego mortgage rates started off the day trending lower following two key reports on manufacturing and construction spending.  First, the Institute for Supply Management manufacturing index came out better than expected.  This report is important as it gauges strength in the manufacturing sector.  Improvement in this sector translates to lower unemployment figures as manufacturers create more jobs to keep up with increased output.  An improvement in unemployment will be key to sustaining the economic and housing recovery started in 2009!

Next out was construction spending data which showed the lowest level since 2004 and the seventh straight month of decline. In order for this trend to reverse businesses and consumers are going to have to feel more confident about their financial positions and job security. Another factor that remains to be seen is what will happen as banks repay their TARP funds and start to release the next wave of foreclosure inventory into the supply side of the market.

So far the Fed has indicated it will keep it’s key rate at or near zero which bodes well for San Diego mortgage rates. After this news the yields on mortgage backed securities and Treasuries alike edged higher allowing lenders to offer lower rates. This morning my wholesale lenders confirmed this by issuing improved rate sheets with a  30 year fixed in the 5.00 to 5.25% range for highly qualified borrowers with a credit score of 740, loan to value at 80% and 1% origination/discount.

Check back frequently for updates on news that affects San Diego mortgage rates.

San Diego mortgage rates improved a bit yesterday but are slightly worse today after a better than expected Jobless Claims report.  Wait a minute? Did he say a better than expected report led to rates getting worse? That’s right! A side effect of an improving job market is the threat of inflation and investors hedge against that fear by selling off fixed income securities. This drop in fixed income securities prices causes a rise in San Diego mortgage rates. This month’s report showed the lowest number of first time  unemployment benefit claims since July of last year while economists were expecting a slight increase in that figure.

My wholesale lenders are issuing rate sheets that are 1/8 to 1/4 percent worse than yesterday. The par 30 year fixed rate remains in the 5.00% to 5.25% range for well qualified borrowers.  Well qualified assumes a FICO credit score of 740 or higher, loan to value at 80% or less and one point loan origination/discount.  The market will close early today and is closed all day tomorrow to allow the bond traders to recover from their New Year’s Eve hangovers. I wish you all a safe and happy new year and for tonight the key word is “Designated Driver”.  Check back next year for news affecting San Diego mortgage rates.

San Diego mortgage rates are showing signs of improvement today after a week of rising rates. This is largely due to an above average auction yesterday for 5 year treasury notes which in turn caused mortgage backed securities (MBS) to recoup their earlier losses. Remember if MBS prices fall then mortgage rates rise and conversely when MBS prices are high, mortgage rates are low.

The Treasury successfully auctioned another $32 billion of 7 year notes today.  This is positive for our economy because it shows that despite our massive amounts of  borrowing demand for our debt instruments remains strong. This strong demand keeps San Diego mortgage rates low!!

Many of my wholesale lenders are issuing rate sheets that have improved from yesterday.  The 30 year fixed rate mortgage is in the 4.875% to 5.25% range for well qualified borrowers.  Well qualified assumes a 740 FICO or higher, loan to value at 80% or less and one point loan origination/discount.  Check back frequently for news that affects San Diego mortgage rates.

San Diego mortgage rates are unchanged after the release of the Case Shiller home price index put out by Standard and Poors. The index data reported today covers national home prices in the month of October and they were virtually unchanged from September. A look at the index from October 2008 shows prices to be down approximately 6-7% nationally however the best performers were western cities like Phoenix, Seattle, San Diego, San Francisco and Los Angeles as these were hardest hit by foreclosures.  San Diego home prices were only down 2.4% from October of last year. The good news is that it couldn’t be a better time for buyers! San Diego mortgage rates are near historical lows, home prices are near the bottom of the cycle and the first time home buyer tax credit is extended into 2010.

In the bond market we’re seeing more of the same. Traders are waiting until after the new year to make decisions. We do have one final bond auction for 2009 tomorrow but can expect little in the way of mortgage backed security (MBS) price volatility. Remember that as MBS prices rise, mortgage rates decline. My lenders have been sending me rate sheet improvement notices this afternoon and the 30 year fixed for well qualified borrowers is now in the 4.875 – 5% range. This assumes a minimum FICO of 740, a loan to value of 80% and 1 point discount/origination.  Check back frequently for news affecting San Diego mortgage rates.

San Diego mortgage rates increased last week with most lenders hovering around 5.00% on a 30 year fixed mortgage for well qualified borrowers. Keep in mind that during this time of year lenders are not setting their rates under normal guidelines. There is a seasonal adjustment that affects borrowing costs during the holidays so even if bond prices increase lenders probably won’t lower mortgage rates until after the new year. Remember that under normal market conditions, as bond prices rise interest rates fall.

Rates remained unchanged after the Treasury Department’s $118 billion bond auction today. Demand was somewhat weaker than expected raising continued concerns of higher interest rates in 2010. Market participants look at the demand for our bond auctions to gauge its success or failure.  So far this demand has been strong especially from countries like China and Japan. This has helped keep San Diego mortgage rates near the historic low levels that they are today. In order to keep rates from rising we’ll need to see continued strong demand at these bond auctions.

Again, due to the season, this week won’t have much economic data affecting rates. Tomorrow the monthly home price index will be reported along with the consumer confidence report and on Wednesday we’ll see the jobless claims report. Most lenders are posting 30 fixed rates from 5.00% to 5.25% for the well qualified borrowers. Check back frequently for news that affects San Diego mortgage rates.