Mortgage Rates – November:
Are things changing for mortgage rates in November?
Looking back; there were a lot of headwinds for mortgage rates in October. US – China agreed on a “phase 1” trade deal, it looked like an orderly Brexit was going to happen and some of the economic data (early on) was showing signs of strength. Mortgage rates moved higher and there were some concerns we might see a spike in rates similar to October/November 2018.
However mortgage rates only increased about a .25% (generally speaking) which is much smaller than the 0.75% increase in October/November 2018. And this was before we learned that the trade deal was only based on a general agreements (nothing written), Brexit was going to be delayed….again and the economic data was starting to reverse. And there are signs that the early-mid October bump up in mortgage rates is leveling out as the market starts to improve heading into November.
Mortgage Rates - Conforming Loans
Mortgage Rates - FHA Loans
Mortgage Rates - Jumbo Loans
Mortgage Backed Securities & Treasury Snapshot:
November 1, 2019:
Mortgage Backed Security FNMA 3.0 started the day at 101.59, and the FNMA 3.5 coupon started the day at 102.64. The 10y Treasury yield started the day at the 1.68% level.
Post jobs report the 10y yield moved to 1.72% and then settled at the 1.70% level shortly after. More on the jobs report below. Mortgage rates in California and across the country will start off the day at similar levels to yesterday.
November 4, 2019:
Mortgage Backed Security FNMA 3.0 started the day at 101.48, and the FNMA 3.5 coupon started the day at 102.61. The 10y Treasury yield started the day at the 1.75% level.
November 5, 2019:
Mortgage Backed Security FNMA 3.0 started the day at 101.41 and the FNMA 3.5 coupon started the day at 102.59. The 10y Treasury yield started the day at the 1.82% level.
November 6, 2019:
Mortgage Backed Security FNMA 3.0 started the day at 101.23 and the FNMA 3.5 coupon started the day at 102.48. The 10y Treasury yield started the day at the 1.84% level.
Yesterday was a brutal day for both Treasuries and Mortgage Backed Securities. Bonds sold off significantly after a better than expected ISM Non-Manufacturing report. At one point it looked like the 10y yield might reach 1.90% however buyers eventually stepped in and helped the 10y yield close below 1.87%.
The FNMA 3.0 coupon moved as low as 101.08 and the FNMA 3.5 coupon moved as low as 102.38.
November 7, 2019:
Mortgage Backed Security FNMA 3.0 started the day at 101.20 and the FNMA 3.5 coupon started the day at 102.52. The 10y Treasury yield started the day at the 1.88% level.
Bonds are selling off this morning after overnight trade news. China announced that the there is an agreement that both sides will reduce tariffs at the same time and that both sides continue to work closely together.
November 8, 2019:
Mortgage Backed Security FNMA 3.0 started the day at 100.91 and the FNMA 3.5 coupon started the day at 102.42. The 10y Treasury yield started the day at the 1.94% level.
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Important Economic Data This Week:
Here we cover the daily economic events that might impact mortgage rates. After the report comes out we’ll update the post with that information and comment on if there is a potential impact on on the Mortgage Backed Securities market and consumer mortgage rates.
On November 1st we have the all important Jobs report and the ISM Manufacturing report for October. Then on Monday we have ISM-NewYork Index and Factory Orders. On Tuesday it’s the ISM Non-Manufacturing report. Wednesday we have the weekly Mortgage Market Index, and an important 10y Note Auction. On Thursday it’s the weekly unemployment claims and Consumer Credit for September. On Friday it’s the 1y and 5y Inflation Outlook, Wholesale Sales and Wholesale Inventories.
The October Employment report was stronger than expected. The market anticipated 89,000 jobs created (non-farm) and the report showed 128,000 jobs created despite the GM auto workers strike which lowered the number of jobs created by approximately 50,000 (rough estimate).
The unemployment rate was steady at 3.6% and Average earnings increase 0.2% (below expectations) after last months dismal report of no growth in wages.
Employment continues to be a bright spot in the economy however we are creating far fewer jobs then we were in 2018.
The market is expecting a reading of 48,9 after last months reading of 47.8. A reading below 50 shows contraction. The reading came in at 48.3. The prices paid component dropped to 45.5 vs 49.7 in September and the employment index increased from 46.3 to 47.7.
ISM Non-Manufacturing PMI:
The market was anticipating a reading of 53.5 after last months reading of 52.6. The actual reading came in higher than expected; 54.7. Post report the bond market sold off significantly.
Mortgage Market Index:
The Mortgage Market Index came in at 518.7; slightly down from last weeks reading of 519.2. The Refinance component reading came in at 2102.7 after last weeks reading of 2066.0. The Purchase component came in at 241.0 which is below last weeks reading of 247.2.
The report showed fewer claims this week compared to last – 211,000 vs 215,000.
Consumer Credit for September:
Last months reading came in at 17.90 and current market expectations are for a 15.00 reading.
Wholesale Inventories and Wholesale Sales:
Market expectations for Wholesale Inventories is -0.3% and for Wholesale Sales it’s 0.1%. Last month the Wholesale Inventories reported at -0.3% and Wholesale Sales reported at 0.0%.
5y and 1y Inflation Outlook:
Last month’s reading for the 5y Inflation Outlook was 2.3% and the 1y Inflation Outlook was 2.3%.
JB Mortgage Capital, Inc.:
We offer industry low mortgage rates for both refinance and purchase transactions, personal one-on-one service and we have an A+ rating with the Better Business Bureau (BBB). We also have a top rating with the Business Consumers Alliance (AAA).
We utilize the latest technology to ensure a fast closing and Loan Officer Kevin O’Connor has over 14 years of experience as a mortgage professional.
When it comes to mortgage rates please keep in mind that mortgage rates adjust daily; sometimes they adjust multiple times in a day when the bond market is volatile.
Also things like obtaining cash out, lower credit scores, higher Loan-To-Value ratios, rental properties and the subordination of a second mortgage will cause in an increase in your mortgage rate.
To obtain the most up-to-date quote, specific to your loan scenario be sure to contact Loan Officer Kevin O’Connor at 1-800-550-5538 or you can submit a “Contact Us” request on the our website.
Loan Officer Kevin O’Connor:
Kevin grew up in California and works with clients throughout the state. From the initial quote to the application to the final closing; Kevin works directly with each and every homeowner and encourages his clients to ask questions so that they’re better informed. He updates koloans.com on daily basis and you can connect with him on social media: Twitter Rates01