Second Week of September

Mortgage Rates Second Week of September:

Conforming, FHA and Jumbo fixed mortgage rates are near recent lows as we move into the second week of September. However concerns over a possible trade deal and a recent bond market selloff are putting pressure on mortgage rates to move higher. If you are looking to refinance your current mortgage or if you are in the process of buying a new home it’s a good idea to lock in terms as soon as you can to avoid any possible increases.

Mortgage Rates - Conforming Loans

Mortgage Rates - FHA Loans


Mortgage Rates - Jumbo Loans

Mortgage Backed Securities & Treasury Snapshot:

September 9th, 2019:

Mortgage Backed Security FNMA 2.5 started the day at  100.53, FNMA 3.0 started the day at 101.83, and the FNMA 3.5 coupon started the day at 102.61. The 10y Treasury yield started the day at the 1.58% level.

September 10th, 2019:

Mortgage Backed Security FNMA 2.5 started the day at  99.97, FNMA 3.0 started the day at 101.38, and the FNMA 3.5 coupon started the day at 102.48. The 10y Treasury yield started the day at the 1.64% level.

It’s clear the recent lows in the 10y yield are a market bottom for now. Will the 10y yield eventually move below 1.44%? Impossible to say and the fact is that no one knows if it will or won’t happen. The best thing for Mortgage Backed Securities and mortgage rates will be for the bond market to stabilize and move sideways.

September 11th, 2019:

Mortgage Backed Security FNMA 2.5 started the day at  99.48, FNMA 3.0 started the day at 101.27, and the FNMA 3.5 coupon started the day at 102.42. The 10y Treasury yield started the day at the 1.72% level.

Simply put; Treasuries, Mortgage Backed Securities and mortgage rates in California (and across the country) will be under pressure until market volatility subsides.

When will that happen?

No one knows and no one can even be sure “if” it will happen which is why it’s a good idea to lock in terms and not take chances with mortgage rates in this current environment.

Later today there is an important 10y Auction; ideally we’d like to see strong demand considering the 10y yield has moved from 1.50% to 1.70% in five days. If there is a significant market reaction I’ll update the post with that information and how it might impact mortgage rates.

September 12th, 2019:

Mortgage Backed Security FNMA 2.5 started the day at  99.86, FNMA 3.0 started the day at 101.50, and the FNMA 3.5 coupon started the day at 102.61. The 10y Treasury yield started the day at the 1.68% level.

Rally on!

Unfortunately not. The market rallied for 10-20 minutes after ECB news hit the wires; then it vanished after the CPI report came in (more on this below) and reports that trade tensions were easing. By 8am PST the 10y yield was at 1.745% and Mortgage Backed Securities were slightly positive (after moving much higher post open).

September 13th, 2019:

Mortgage Backed Security FNMA 3.0 started the day at 101.13, and the FNMA 3.5 coupon started the day at 102.38. The 10y Treasury yield started the day at the 1.79% level.

After the open the selling continued pushing the 10y yield to over 1.86%.

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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 mortgage rates.

On Monday we have Employment Trends and the Consumer Credit report (for July). There are no major economic reports scheduled for Tuesday. On Wednesday we have the weekly Mortgage Market Index,  Core Producer Prices report, Wholesale Sales and Wholesale Inventories reports. In the afternoon there is an important 10y Note Auction.

On Thursday we have the Consumer Price Index for August, the Core CPI and a 30y Bond Auction in the afternoon. On Friday we have the Retail Sales report for August, Export and Import prices report, Consumer Sentiment and the 1y and 5y Inflation Outlook reports.

Employment Trends:

Last months reading came in at 111.0 and the most current reading came in at 110.62. The report had no impact on the bond market and no impact on mortgage rates.

Consumer Credit (July):

Last months reading came in at 14.60 and the market expectations for this month are for a reading of 16.10. We’re not expecting a significant impact to current mortgage rates no matter what is reported however if consumer credit declines for a second month in a row it’s something we should start paying attention to. Credit is a main driver for consumers; declining credit would be a negative for consumer spending.

Mortgage Market Index:

Mortgage applications increased in the latest MBA survey of mortgage professionals. The Mortgage Market Index came in at 569.8 after last weeks 558.5 reading. The Refinance Index came in at 2377.5 (last week it was 2367.2) and the Purchase Index came in at 253.5 and last week it was 2367.2.

According to the report; the average 30 year fixed rate was 3.82% (points/fees being charged directly to the borrower). It’s safe to assume the average rate will be higher in the next survey unless something dramatic happens before the weekend.

Core Producer Prices:

Expectations were for reading of 2.2% (year/year) after last months reading of 2.1%. However the reading came in higher than expected; 2.3%. Producer Prices for August increased 0.1% (more than expected) and monthly Core Producer Prices also came in higher than expected (0.3% increase).

Post report bond yields moved higher and Mortgage Backed Securities sold off.

Wholesale Inventories:

Expectations were for an increase of 0.2% however the reading came in at 0.3%.

Wholesale Sales:

Today’s reading came inline with expectations; a 0.2% increase.

Core CPI:

Expectations were for a 2.3% annual increase and a 0.1% month over month increase. The annual rate came in higher than expected (2.4%) and the month over month increase was inline with expectations. Post report Treasuries and Mortgage Backed Securities sold off due to the increased inflation.

Weekly Unemployment Claims:

Last week the report showed 217,000 people filled for unemployment claims and this week the number came in at 204,000.

Retail Sales Report:

Retail Sales for August came in at a 0.4% increase after last months 0.7% increase. Expectations were for a 0.2% increase so the report came in better than expectations. The consumer has been the bright spot for the economy.

Export and Import Prices:

The Export and Import Prices report came in below expectations. Export prices showed a decline of 0.6% and import prices shows a decline of 0.5%. Expectations for Export prices was a decline of 0.2% (after last months gain of o.2%) and expectations for Import Prices were for a decline of 0.4% after last months reading of a 0.2% gain.

1y and 5y Inflation Expectations:

The 1y inflation report came in at 2.8% and the 5y inflation report came in at 2.3%.

Tips On How To Close Your Refinance Fast:

With mortgage rates near multi-year lows many homeowners are moving forward with a refinance. Some are refinancing to lower their interest rate, some are looking to move from a 30 year fixed term to a 20 or 15 year fixed term and others are looking to obtain cash out to remodel the home and/or payoff debt.

I would guess each homeowner that is looking to refinance would like to see the process take as little as time as possible. With us it can take as little as two-three weeks but the usual time frame is four weeks from when we have everything in and submitted to underwriting.

Here are some tips to help ensure you have a speedy refinance:

  • Turn in all the requested documentation quickly; ideally within 24-48 hours of the request. And if the Loan Officer has questions make sure you respond in a timely manner with a complete answer.
  • Don’t turn in documentation that is not requested. Make sure you turn in exactly what the Loan Officer is asking for. And it’s important not to assume you can send something else in as a replacement.
  • If you need an appraisal schedule that ASAP. Usual an appraiser will complete the inspection in 20-30 minutes and will come in the morning, afternoon or evening (as long as there is sunlight).

Following these guidelines could save you a week or more in processing times. If you have any questions please don’t hesitate to ask.

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).

A+ Rating With The BBB

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.

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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 OConnor

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