Mortgage rates in San Diego for August 11, 2008. Loan amounts up to $417,000:
3/1 ARM 5.500%
5/1 ARM 5.750%
7/1 ARM 5.875%
10/1 ARM 6.250%
30 Yr Fixed 6.375%
All rates offered to the borrower with 1 point cost. Rate quotes assume a purchase transaction with a 20% down payment, 720 credit score, and full income qualification. Rates are subject to fluctuation. Custom rate quotes and rate lock advice are available by calling (858)-777-9751.
SAN DIEGO MORTGAGE RATE TREND:
Next 7 days: Slightly Higher
Next 30 days: Neutral
Next 3 months: Neutral
Remember the song "Stuck in the Middle With You" by Stealer's Wheel? It was background music for a particularly gruesome scene in the Quentin Tarantino movie, Reservoir Dogs.
Well, I don't know why I came here tonight
I got a feelin' that something ain't right
I'm so scared in case I fall off my chair
And I'm wonderin' how I'll get down those stairs
Clowns to left of me, jokers to the right
Here am I stuck in the middle with you
Wall Street bond traders are singing that tune and it's bouncing mortgage rates all over the place. They're scared because they feel that "somethin' ain't right" with the underlying loans held by Fannie and Freddie. Still, the US Treasury Secretary has pretty much guaranteed that the government will back Fannie Mae and Freddie Mac should the dung hit the blades.
While the treasury securities market has been somewhat stable these past few weeks, mortgage-backed securities are bouncing all over. Some days ,they act like treasuries and the spread narrows. Other days, they act like junk bonds and the spread widens. If you listened to my "dog on a leash" analogy, imagine a rabid animal running away from a scared owner one day and a docile pet running and cuddling with him the next.
Like the song, says, we're "stuck in the middle" which means, in my mind, we'll see mortgage rates rise a bit, to the 6.5% level, then drop to the 6.0% level. We still haven't seen the full effect of the Russian invasion to Georgia. The American response will be much more than a Bush and Putin exchange at the Olympics. Georgia is a SERIOUS U.S. ally with a major oil pipeline running through it. The Russian attack was clearly unprovoked and part of a concerted effort to weaken the US dispute with Iran.
We're locking loans that are closing within 10 days with an eye towards locking late August closings some time next week (when mortgage rates come back down).
