Author bio section

I am the author of this blog and also a top-producing Loan Officer and CEO of InstaMortgage Inc, the fastest-growing mortgage company in America. All the advice is based on my experience of helping thousands of homebuyers and homeowners. We are a mortgage company and will help you with all your mortgage needs. Unlike lead generation websites, we do not sell your information to multiple lenders or third-party companies.


After weeks of worsening rates, it seemed California mortgage rates were getting stable. But the employment report and some other news last week delivered a knockout punch to any hope of rates getting better.

Mortgage rates are directly impacted by how mortgage backed securities(MBS) are traded on wall street. If MBS fall in price, the rates go up. On Monday and Tuesday the MBS fell by 9 basis points (bps) each. Thats only a minor impact on rates. But then on Wednesday and Thursday it went down by a whopping 66 bps. If that wasn’t enough, the employment report on Friday sank the MBS by another 24 bps. That brings the week’s total to a drop of 108 bps.

Such a drop in price of MBS in a week, would translate to an increase in mortgage rates for most programs by 0.25%. A quick glance on mortgage rates published by top banks confirm that. They are all advertising close to or higher than 4.00% APR for most of the mortgage program.

The 10 year treasury note yield also climbed to 2.08%, the highest rate in over a year. The MBS usually trades in the same direction as 10 year note.

Get a Live Rate Quote

The unemployment rate in February declined to 7.7% frm 7.9% and down 0.1% more than thought. Non-farm jobs increased 236,000 ; non-farm private jobs increased 246,000. Non-farm jobs are now at the highest since last November and the unemployment rate at the lowest since December 2008.

The strong employment report also brings the Fed back into focus in terms of ending its Quantitative Easing (QE) sooner than what was thought just 48 hours ago. One more month of strong employment data in March will likely cause the Fed to begin planning in earnest its gradual reduction of monthly Fed purchases of MBSs and treasuries. Fed’s purchases of MBSs is one of the biggest reasons why the mortgage rates have remained low. If the Fed decides to stop or reduce the purchase, there could be a dramatic increase to rates.

If you were thinking of refinancing, time could be running out to get a really low mortgage rate. The mortgage rates would most likely not get better from here. In fact, I see the rates gradually worsening.

Get a live mortgage rate quote

Related Posts

  • 67
    Refinancing help for underwater California homeowners whose loan is not backed by Fannie Mae or Freddie Mac may soon become a reality. Unofficially billed as HARP-3, it is one of the top priorities of Obama government. Obama government is considering expanding the Home Affordable Refinance Program (HARP) to include homeowners…
    Tags: harp, mortgage, san, jose, dos, conforming
  • 66
    Mortgage Rates have skyrocketed to their highest levels since August 2012, prompting some banks to increase the rate to 4% and beyond. On Friday, MBS (the mortgage backed securities that directly influence mortgage rates) tanked 62 basis points. That came after 26 basis points drop on Thursday. More bad news…
    Tags: rates, mortgage, rate, mbs, year, harp, conforming
  • 61
    Weekly dose of economy and mortgage market news that affects mortgage rates for San Jose Home buyers and Home owners. The Week that was: Economic data last week confirmed once again that inflation fears are way overblown; Dec CPI up just 0.1%. Factory use and industrial production improved again as…
    Tags: mortgage, year, rates, san, jose, rate
  • 60
    Mortgage rates continue its relentless rise. After reaching historical lows at the end of April, the rates have increased for 7th straight week. Today's statement by Fed chairman Ben Bernanke further worsened the market. By end of the day, rates were at a 18 months high with outlook of more…
    Tags: rates, mortgage, rate, mbs, fed, highest, conforming
  • 59
    Mortgage rates for California and rest of the country continue to trend lower. Its at a point where a 30 Year-Fixed rate under 4% can again be a reality. Last week mortgage backed securities (MBS) improved 95 basis points. Whenever MBS prices go up, mortgage rates go down. Weaker than…
    Tags: mortgage, rates, rate, mbs, fed, employment, year, conforming