The Mortgage Interest Rate Lock Advisory for Salem NH for October 30, 2009
Here are some of the events affecting mortgage interest rates today in Salem, NH.
What the Mortgage Backed Securities Market is Doing Today:
The price of the FNMA 30-Year 4.5% MBS coupon opened at 100.97 this morning - up 6/32 from yesterday's close.
The FNMA 30-Year 4.5% MBS coupon is currently trading at 100.97 - the same as its opening. Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and mortgage interest rates come down with it. I expect that mortgage interest rates will be the same or 0.125% better in price this morning as compared to yesterday.
Recent Activity in Mortgage Backed Securities:
The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- Personal Income and Outlays Report for September - as expected, there was no change in income, and there was a 0.5% decline in consumer spending in September. This follows a 0.2% rise in personal income and a 1.3% rise in consumer spending in August. While year-to-year income is up 1.5%, it's the lowest increase on record. Meanwhile, real consumer spending declined 0.6% in September after a 1.0% rise in August.
This index is watched closely because consumer spending makes up two-thirds of the U.S. economy. This data gives us an indication of the consumer's ability to spend and as well as their current spending habits. A rising income indicates that consumers have more money to spend and makes economic growth more of a possibility. While the index came in as expected, consumer spending fell. This could mean a weak retail spending this holiday season. That led to an increase in prices of mortgage backed securities rose which led to a decrease in mortgage interest rates this morning.
- 3rd Quarter Employment Cost Index (ECI) - there was a 0.4% rise in employment costs last month - the same as the previous month - and is slightly less than the 0.5% increase that was expected. This index tracks employer costs for salaries and benefits. This report had no impact on the mortgage market or mortgage interest rates this morning.
- Update to University of Michigan's Index of Consumer Sentiment - the consumer confidence reading rose to 70.6, a little more than the 70.0 reading that was expected, and follows a 69.4 reading the previous month. This suggests that consumer confidence is holding fairly steady. This index is moderately important because consumer sentiment is directly related to the strength of consumer spending. This report had little impact on the mortgage market this morning.
For more anlayis on today’s economic reports and the impact is had on the markets, watch this video from CNBC:
In other news, the appropriations committees in both the House and Senate are proposing to extend the temporary conforming jumbo loans limits through 2010. The appropriations bill still face votes a full vote in both the House and Senate.
Also on tap is the extension and expansion of the homebuyer tax credit. The latest version would extend the $8,000 first-time homebuyer tax credit to home sales that go under contract by April 30 and close by June 30, 2010. A new $6,500 tax credit would be available for other home buyers who have owned a home during five of the eight previous years. Additionally, the annual income limit to qualify for the tax credit would be $125,000 if you're single and $250,000 for couples. The first-time homebuyer tax credit bill also still face votes a full vote in both the House and Senate.
There are a number of economic reports scheduled for release next week including the monthly employment situation report on Friday. The Federal Open Market Committee (FOMC) will also meet again next week. Look for more details on next week's events on Monday.
What's Happening With Mortgage Interest Rates Today:
Light to moderate volatility. Overall, it has been an active - and volatile - week for the mortgage market and mortgage interest rates. I expect that the markets will settle down today and expect to see some calmness.
My Mortgage Interest Rate Lock Advice for Today:
If I were considering financing/refinancing a home, I would...
- Lock if my closing was taking place within the next 7 days
- Float if my closing was taking place between 8 and 30 days
- Float if my closing was taking place between 31 and 45 days
- Float if my closing was taking place between 46 and 60 days
This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.
Get today's mortgage interest rates for your situation in Salem, NH.
East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB