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Updated Interest Rates

VMG Weekly Rate Tracker – 11/25/2014


 NMLS# 35986    
VMG Weekly Rate Tracker- Your Local Mortgage Leaders (sharing is caring)
DATE:  Tuesday, November 25th, 2014
TIME:  1:45 PM PST
SUGGESTION:  LOCK/BE IN POSITION TO LOCK –  Keep a close eye and get updates from your Loan Consultant (see below for more commentary)
VMG CLIENT’S FIXED RATE PRICING OPTIONS  (rates subject to change)
***Below rate optional pricing has NO additional lender-related fees (i.e. processing, underwriting, application, etc.).  Lender credits below result in (negative) lender fees applied toward 3rd party fees or prepaids (taxes, insurance, interest).  Contact Loan Consultant for personalized quote.
*Rates change daily.  Conforming interest rate samples based off $240,000 loan amount, 75% Loan to Value, 740 or higher FICO score, with impounds on a 30 day rate lock period.  FHA/VA based off 3.5% down payment, but other same variables.  Costs or credits shown pertain to interest rate and do not include any other applicable 3rd party title and escrow charges or prepaid tax and insurance reserves which may or may not apply.  Lock period suggested depends on current loan volume and lending climate at time of loan application and approval.  Other risk-based pricing adjustment may apply.  The displayed annual percentage rates (APRs) include total points and additional prepaid finance charges but do not include other closing costs.   On adjustable-rate loans, rates are subject to increase over the life of the loan.   Learn more about assumptions and APR Information. Loan pricing may only be locked through a home loan consultant to be effective.  Rates will depend in part on your unique credit history and transaction characteristics. Please email or call for updated pricing at anytime as rates and pricing are subject to change. This information does not constitute a loan commitment or approval.
Rate Lock Advisory – Tuesday Nov. 25th 

Tuesday’s bond market has opened up slightly following the release of mixed economic data and a mixed open in stocks. The Dow is currently down 13 points while the Nasdaq has gained 8 points. The bond market is currently up 3/32 (2.29%), which may improve this morning’s mortgage rates by approximately .125 of a discount point. However, most of that improvement is from strength late yesterday and not gains this morning.

There were two pieces of economic data released this morning. The first was the first revision to the 3rd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. It came in with a 3.9% annual rate of growth that exceeded forecasts. Analysts were expecting to see a downward revision from the initial estimate of 3.5%, not an upward change. This means the economy was stronger during the 3rd quarter than many had thought, making the data bad news for bonds and mortgage rates.
The second report of the morning was November’s Consumer Confidence Index (CCI) at 10:00 AM ET. It gave us favorable results that helped offset the GDP news. The Conference Board announced that November’s reading fell to 88.7 from October’s revised 94.1. This means that surveyed consumers were not nearly as optimistic about their own financial and employment situations as analysts were expecting. That is good news for bonds because waning confidence usually means consumers are less likely to make a large purchase in the near future, limiting economic growth.

We also have today’s 5-year Treasury Note auction to watch. Results of the sale will be posted at 1:00 PM ET, so any reaction will come during early afternoon hours. Strong investor demand in these sales usually makes bonds more attractive to investors and brings more funds into the broader bond market. The buying of bonds that follows often translates into lower mortgage rates. On the other hand, a lackluster interest in the sale could lead to bond weakness and possibly a small upward revision to mortgage rates later today. We then get to repeat this tomorrow with the 7-year Note sale.

Tomorrow has four economic reports being released that may affect mortgage rates. The first is October’s Durable Goods Orders at 8:30 AM ET. This data helps us measure manufacturing strength by tracking orders for big-ticket items or products that are expected to last three or more years, such as airplanes, appliances and electronics. This data is known to be quite volatile from month-to-month, so sizable swings from the previous month are fairly normal. It is expected to show a 0.6% decline in new orders. A larger than expected drop would be considered good news for the bond market and mortgage rates as it would indicate manufacturing sector weakness. However, we need to see a sizable variance from forecasts for the markets to have a noticeable reaction due to the usual volatility in the data.

October’s Personal Income and Outlays data is the second report of the day. This data measures consumers’ ability to spend and their current spending habits and is important because consumer spending is such a large part of the U.S. economy. It is expected to show that income rose 0.4% and that spending increased 0.3%. Weaker than expected readings would mean consumers had less money to spend and were spending less than thought. That would be favorable news for bonds and could lead to improvements in mortgage rates tomorrow morning. 

The revised November reading to the University of Michigan’s Index of Consumer Sentiment will be posted just before 10:00 AM ET tomorrow morning. As with today’s CCI, it will give us a measurement of consumer willingness to spend. Analysts are expecting to see an upward revision to the preliminary reading of 89.4. Unless we see a significant variance from the forecasted 90.0, I don’t think this data will cause much movement in mortgage rates tomorrow.

October’s New Home Sales report will close out the week’s economic calendar at 10:00 AM ET tomorrow. It will give us an indication of housing sector strength, but is the week’s least important release. Analysts are expecting to see little change between September and October’s sales of newly constructed homes. It will take a large change in sales for this data to influence mortgage rates, partly because this report tracks such a small portion of all home sales.

Harris Consulting, Inc. DBA Vantage Mortgage Group, Inc.
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