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Central Coast Lending: Market and Mortgage Rate Update

Market Update

Last week was a light one for economic data, and included retail sales and little else. Standard weekly releases included the Mortgage Bankers’ Association home loan application index, unemployment claims, and Freddie Mac’s average 30-year fixed interest rate tracker.

Retail sales picked up speed in October, jumping 0.3% over the previous month. The “core” measure, which excludes automobile and gasoline sales, increased 0.6%.

Mortgage purchase activity fell 1.0% last week, and refinance activity fell 11.0%, despite the fact that Freddie Mac registered the national average of the 30-year fixed near its 2014 low – at 4.01%. Last year at this time, the 30-year average was 4.35%.

Lastly, unemployment claims rose to 290,000, which is the highest reading in seven weeks.

Overall, the data is nothing much to write home about. This week, we will see data on industrial production, existing home sales, consumer spending, and housing starts.

To start the week, stocks have improved, with the S&P 500 on pace for its 42nd record close of the year.


Mortgage Rate Update

Mortgage rates start the week lower. Japan’s economy unexpected contracted by 1.6% last quarter. As we have seen, poor economic news around the globe benefits pricing for mortgage rates.

Since August 1, rates have spiked, dipped, spiked, and dipped again. Our graph below takes a look at the pricing for the 4.125% 30-year fixed rate. “Points” refer to the cost that borrowers pay to obtain the 4.125%, expressed as a percent of the total loan amount (in this case, $417,000). Our test case assumes a premium-type loan, with a borrower credit score of 760, a Debt-to-Income ratio of 35%, and a purchase of a single-family detached home.



Central Coast Lending is a California mortgage broker and direct lender based on the Central Coast of California in San Luis Obispo County. Call us today at 805.543.LOAN or email us here to set up a free pre qualification. We are The Mortgage Experts: ask us anything!

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