San Diego Mortgage Rates for The Week of August 5, 2013

San Diego Mortgage RatesSan Diego Mortgage Rates stayed relatively flat this week.  After the bond market tanked last Thursday, the weaker than expected jobs numbers on Friday allowed the bond market to recover all the losses from the previous day. The bond market though, is still stuck in a downward trend, which means mortgage rates could continue to rise over time.

As stated above, the Jobs Report for July was released last Friday and 162,000 jobs were created, below the 175,000 expected. The estimates had ranged up to 224,000 job creations, making the actual number a letdown. In addition, the numbers for May and June were revised lower by 26,000.

The Unemployment Rate did fall to 7.4 percent, while the Labor Force Participation Rate did not change much at 63.4 percent. The LFPR calculation is simple. If you are 16 years old and not in the military, then you either have a job or you don’t. The ratio of people “participating” or working is then compared to the total population.

This report supports that the economy is growing at a sub standard 2 percent. It also supports the Federal Reserve’s decision, announced earlier in the week, to continue its Mortgage Bond purchases at the rate of $85 billion a month.

They said the rate of their bond buying will continue to depend on economic data, and could be either increased or decreased. The Fed also stated that the U.S. economy expanded at only a modest pace during the first half of the year. The previous statement suggested the economy was expanding at a “moderate” pace.

In regards to housing prices, the Case Shiller 20-city Home Price Index saw its largest annual gain since March 2006, increasing 12.2 percent from May 2012 to May 2013. The numbers support that the housing sector is recovering.  Personal Consumption Expenditures came in at 0.2 percent, in line with estimates, showing that inflation is still tame.

How did this affect San Diego Mortgage Rates?

At the end of the day, the Fed does not want home loan rates to rise too quickly and hurt the recovering economy. As it stated last week in regards to  the continued purchasing of Treasury and Mortgage Backed Securities, “taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.”

San Diego Mortgage Rates ended the weak basically where they started, still higher than last month, but still at historic lows.   As a San Diego Mortgage Broker, I have to remind clients that just 8 years ago rates were in the 7% range for 30 year fixed San Diego Home Loans.

I just locked in a rate for a client on a 30 year fixed for a refinance of an investment property.  The loan amount is $350,000 and the loan to value is below 50%.  The client’s credit score was 700. The rate is 4.625% at 0 points and an APR of 4.680%. The payment is $1,799.49.  The client will be saving $177 per month.

What Could Affect San Diego Mortgage Rates This Week?

After last week’s busy calendar, there are just two reports this week.

  • The ISM Services Index starts the week off on Monday.
  • The only other report this week is Thursday’s Weekly Initial Jobless Claims. Last week, claims fell to 326,000, the lowest level since January 2008.

Remember, that weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and San Diego home loan rates to improve, while strong economic news normally has the opposite result.

If you are interested in getting a San Diego mortgage rate quote, please click HERE or feel free to give me a call at 619-312-0612. I am a Mortgage Broker who specializes in closing loans on time with great customer service and I look forward to helping you secure the best San Diego Home Loan possible.

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