San Diego Mortgage Rates Update: 01/04/2010

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.