The Bridgewaters, Massachusetts

The Mortgage Interest Rate Lock Advisory for Bangor ME for September 29, 2009

Here are some of the events affecting mortgage interest rates today in Bangor, Maine.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened down 1/32 at 101.31.

The price of the FNMA 30-Year 4.5% MBS coupon closed up 7/32 yesterday at 101.34 (as shown by the white line). MBS wa down as much as 6/32 this morning, but is currently trading up 1/32 at 101.36 (as shown by the blue line). Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage interest rates. I expect that mortgage interest rates will be 0.125% - 0.25% worse in price this morning as compared to yesterday, but may improve this afternoon.

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

• Consumer Confidence Index (CCI) for September - consumer confidence declined last month as the Conference Board reported a reading of 52.1, up from a 54.1 reading in August. Analysts were expecting a reading of 57.0. The primary reason for the decline is the current job market: More people are saying that jobs are more difficult to get, and 19.8% of those who have jobs are reporting a decline in incomes. This index provides us with a measurement of the willingness of consumers to spend. A decrease in the index indicates that consumers are less optimistic about their own financial situations, and are less likely to make large purchases in the near future. This resulted in lower mortgage interest rates late this morning.

In other news, Case-Schiller today reported that home prices on average rose 1.6% last month. In addition, 18 of the top 20 metro areas have reported home price increases in each of the last three months. The rate of decline has also improved for the third month in a row, and is now down just 13.3% from a year ago, up from a negative 19% in January.

David Blitzer, chairman of the S&P Index Committee, said that "the rate of annual decline in home price values continues to decelerate and we now seem to be witnessing some sustained monthly increases across many of the markets"

According Jennifer Lee of BMO Capital Markets, "... house prices looked to have bottomed, which is the much-needed ingredient required to bake this housing market recovery."

Watch this video from CNBC to learn more:

What's Happening With Mortgage Interest Rates Today:

Low to Moderate Volatility. Overall, look for some volatility in the mortgage market today.

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.

For the best mortgage interest rates in Bangor, ME, click here.

The key home loan financier operating on the secondary mortgage market has seen much better days with its immense portfolio. Just like most other lending institutions it, too, has been slowly bleeding as foreclosures keep shaking its once solid foundation. So much so that Washington had to bail it out a while back. Yet, it's still doing what it was mandated to do, invest in mortgage paper.

Fannie Mae, to stem growing losses, is gradually hiking mortgage underwriting criteria, though. In the latest round of updates that'll go in effect November 1, the borrower's FICO has to be 620 or better for every home loan that complies with its Selling Guide. This date applies to manually underwritten and FHA and VA loans. Furthermore, for mortgages routed through Fannie Mae's Desktop Underwriter the start date is December 12, pushed there to get the software configured. Excluded from this FICO upgrade are Fannie Mae's Refi Plus products and manually underwritten loans with non-traditional credit. The minimum score now is 580 for most programs and government loans have none.

Southern Nevada - Las Vegas, Southern Highlands, Summerlin, Henderson, Mountains Edge, Anthem and Green Valley among the communities here - is trying to emerge from a deep real estate slump and these changes naturally will hamper that. The same goes for many other areas in the country, from Arizona and California across to Florida and elsewhere. Not in a major way, but still. The home loan guidelines are already tough enough, so another degree higher will put more squeeze to getting approvals.

On the other hand, as the national housing market continues to plod along unsteadily, Fannie Mae applying more prudent risk management in mortgage lending is understandable. It's already supported by the government. If it makes more risky loans and they increasingly default, it needs more money from Washington to stay in business. In reality, that means the taxpayer who was approved for a mortgage and subsequently goes bust ends up paying for it himself. Stopping the potentially self-defeating cycle at the first step seems to be the right thing to do.

The Mortgage Interest Rate Lock Advisory for September 28, 2009

Here are some of the events affecting mortgage interest rates today in Hyannis, Massachusetts.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened down 1/32 this morning from Friday's close to 101.09.

The price of the FNMA 30-Year 4.5% MBS coupon closed up 6/32 on Friday to 101.13 (as shown by the white line), and was up 18/32 for the week. MBS is currently trading up 2/32 at 101.19 (as shown by the blue line). Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage interest rates. I expect that mortgage interest rates will be essentially be the same in price today as compared to Friday.

News and Events That Could Affect Mortgage Interest Rates Today:

• There are no economic reports scheduled for release today.

What's Happening With Mortgage Interest Rates Today:

Low to moderate volatility. Overall, I don't expect mortgage interest rates to move much and will be influenced mostly by the stock markets today.

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.

For the best mortgage interest rates in Hyannis, MA, click here.

The Mortgage Interest Rate Lock Advisory for Concord NH for September 24, 2009

Here are some of the events affecting mortgage interest rates today in Concord, New Hampshire.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened flat this morning - the same as yesterday's close - at 100.94.

The price of the FNMA 30-Year 4.5% MBS coupon closed up 9/32 yesterday at 100.94 (as shown by the white line). MBS is currently trading up 5/32 at 100.81 (as shown by the blue line). 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 essentially be the same in price today as compared to yesterday.

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

• Durable Goods Orders for August - orders for durable goods came in well below expectations in August. Orders for durable goods fell 2.4%, and is well below the 1.0% increase that was expected. This follows a 4.8% increase in July. This report gives us an indication of manufacturing sector strength by tracking orders placed with manufacturers for immediate and future delivery of durable goods. The transportation sector fell 9.3% as compared to July, mostly due to the 29.9% plunge in aircraft orders. When transportation is excluded, orders for durable goods in August remained unchanged. Decreases in durable goods orders usually leads to an increase in prices of mortgage backed securities and a drop in mortgage interest rates. However, it appears that this report had a minimal impact on the mortgage market this morning.
  
  
• University of Michigan's Index of Consumer Sentiment Revised Reading for September - the reading came in at 73.5, and is better than expected. The reading the previous month was 70.2. Normally, a higher than expected reading usually leads to an increase in prices of mortgage backed securities and a drop in mortgage interest rates. However, it appears that this report also had a minimal impact on the mortgage market this morning.
  
  
• New Home Sales for August - New home sales fell 9.6% to an annualized rate of 429,000 homes. Analysts expected the report to reveal a slight increase to 445,000 new home sales. While sales of new homes fell, the inventory of new homes on the market also fell. The current inventory now stands at 7.5 months - the lowest level since August 2007. This means that if no new homes come on the market, it will take 7.5 months to sell the current inventory assuming that the rate of sales remains unchanged. However, this data is usually not considered to be very important to the mortgage market.

What's Happening With Mortgage Interest Rates Today:

Low to Moderate Volatility. Overall, look for less volatility in the mortgage market today as compared to yesterday.

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.

For the best mortgage interest rates in Concord, NH, click here.

The Mortgage Interest Rate Lock Advisory for Portland ME for September 24, 2009

Here are some of the events affecting mortgage interest rates today in Portland, Maine.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened up 1/32 this morning to 100.69.

The price of the FNMA 30-Year 4.5% MBS coupon closed up 1/32 yesterday at 100.66 (as shown by the white line). MBS is currently trading up 5/32 at 100.81 (as shown by the blue line). 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 0.125% - 0.25% better in price this morning as compared to yesterday.

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

• Existing Home Sales Report for August - existing home sales fell 2.7% to 5.10 million in August - less than the 5.35 million that was expected. The supply of homes for sale fell 10.6% to 3.622 million. There's now a 8.5 month supply of homes, down from 9.3 months in July, and 10.6 months a year ago. The supply of homes on the market indicates how long it will take to sell the current inventory of home for sale if no other homes were put on the market. While this data indicates the current trend on home sales, it's usually not considered to be very important to the mortgage market.
  
  
• Jobless Claims - There were 530,000 new claims for unemployment last week. Analysts predicted that 555,000 new claims would have been filed. This is the third week in a row that we saw a decline in the news claims for unemployment. The 4-week average is down to 553,500 - the lowest level since January. Continuing claims for unemployment also fell - it now stands at 6.138 million. With the continuing high rate of people unemployed, the threat of wage based inflation remains subdued. Employers do not have to pay higher wages to attract new employees during high unemployment times as people will be happy just to have a job. This data is usually not considered to be very important to the mortgage market.
  
  
• Fed's MBS Purchase Program - The results of this week's purchases of mortgage backed securities by the Feds will be released in the afternoon. As of last Thursday, the Feds have purchased over $862 billion in mortgage backed securities this year. The Feds plan on purchasing up to $1.25 trillion in mortgage backed securities through December 31st.

The FOMC meeting adjourned yesterday with no change in the key short-term interest rates. The Fed stated that while economic activity has improved, they expect that "inflation will remain subdued for some time." The only surprise was the FOMC's announcement that they will ease the purchase of mortgage backed securities. The program will be extended to the end of the first quarter of 2010 to minimize the risk of a yield spike when the Fed finally exits the market. The purchase of mortgage backed securities is still capped at $1.25 trillion.

The 5-year Treasury Note auction that was held yesterday was met with lackluster demand. This had a negative impact on bonds and mortgage backed securities that led to a rise in mortgage interest rates. However, the FOMC's comments indicating that inflation will remain subdued had a positive impact on mortgage backed securities yesterday afternoon, which in turn led to lower mortgage interest rates.

What's Happening With Mortgage Interest Rates Today:

Low to Moderate Volatility. Overall, look for less volatility in the mortgage market today as compared to yesterday. But the results of the 7-Year Note auction are due out at 1 PM this afternoon. If the results of yesterday's 5-Year Note auction is any indication, volatility could pick up this afternoon.

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.

For the best mortgage interest rates in Portland, ME, click here.

The Mortgage Interest Rate Lock Advisory for Medford MA for September 23, 2009

Here are some of the events affecting mortgage interest rates today in Medford, Massachusetts.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened down 6/32 this morning to 100.44.

The price of the FNMA 30-Year 4.5% MBS coupon closed up 7/32 yesterday to 100.63 (as shown by the white line). MBS is currently trading down 4/32 at 100.50 (as shown by the blue line). Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage interest rates. I expect that mortgage interest rates will be 0.125% - 0.25% worse in price this morning as compared to yesterday.

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

• There are no economic reports expected to be released today.

The Federal Open Market Committee (FOMC) will adjourn early this afternoon and issue their press release at 2:15 pm. While there is widespread expectation that key short-term interest rates will remain unchanged, the post-meeting statement could lead to volatility in the mortgage market. Investors will be focusing on any changes in balance sheet expansion or planned unwinding as well as comments on the status of recovery. It's expected the minutes will acknowledge recent improvements in economic activity. At the same time, it will indicate that the recovery is expected to be relatively weak and will persist for some time. If we see any significant weakness in stock markets, then investors may return to the mortgage market as a safe-haven from the volatility. This in turn could lead to lower mortgage interest rates this afternoon.

What's Happening With Mortgage Interest Rates Today:

Low to Moderate Volatility. Overall, look for less volatility in the mortgage market today as there are no economic reports due for release. However, volatility could pick up this afternoon after the FOMC's press release. Otherwise, look for the mortgage market to be heavily influenced by the stock market today.

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.

For the best mortgage interest rates in Medford, MA, click here.

The Mortgage Interest Rate Lock Advisory for September 22, 2009

Here are some of the events affecting mortgage interest rates today in Portsmouth, New Hampshire.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened down 1/32 this morning to 100.38.

The price of the FNMA 30-Year 4.5% MBS coupon closed down 3/32 yesterday to 100.41 (as shown by the white line). MBS is currently trading up 3/32 to 100.50 (as shown by the blue line). 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 essentially be the same in price today as compared to yesterday

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:

• There are no economic reports expected to be released today.

What's Happening With Mortgage Interest Rates Today:

Low to Moderate Volatility. Overall, look for less volatility in the mortgage market today as there are no economic reports due for release. Look for the mortgage market to be heavily influenced by the stock market today.

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.

For the best mortgage interest rates in Portsmouth, NH, click here.

The Mortgage Interest Rate Lock Advisory for September 21, 2009

Here are some of the events affecting mortgage interest rates today in Massachusetts, Maine, and New Hampshire.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened up 4/32 this morning from Friday's close to 100.63.

The price of the FNMA 30-Year 4.5% MBS coupon closed down 9/32 on Friday to 100.78 (as shown by the white line), and was down 8/32 for the week. MBS is currently trading up 5/32 at 100.66 (as shown by the blue line). Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage interest rates. I expect that mortgage interest rates will be essentially be the same in price today as compared to Friday.

News and Events That Could Affect Mortgage Interest Rates Today:

• Leading Economic Indicators (LEI) for August - released by the Conference Board, this index revealed a 0.6% increase, slightly less than the 0.7% increase that was expected. While this is the 4th increase in a row, the LEI is down from the 0.9% increase in June and down from the 0.8% increase in July. The LEI provides an estimate economic activity over the next three to six months. This would indicate that analysts are predicting a moderate increase in economic activity over the next several months. This report had no affect on the mortgage market or mortgage interest rates this morning.

Stock markets are lower today as investors become concerned that recent gains could be a sign of a pending "bubble" in the market.

What's Happening With Mortgage Interest Rates Today:

Low to moderate volatility. Overall, I don't expect mortgage interest rates to move much and will be influenced mostly by the stock markets today.

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.

The Mortgage Market Watch for the Week of September 21, 2009

Events Affecting the Mortgage Market This Week:

There are 3 important Treasury auctions scheduled this week. They are the 2-year Note auction on Tuesday, the 5-year Note auction on Wednesday, and the 7-year Note auction on Thursday. Normally, the increased supply of Notes and bonds puts upward pressure on the bond and mortgage markets. But if these auctions are met with strong demand from investors, prices of mortgage backed securities should move higher which in turn should push mortgage rates lower. If these auctions are met with weak demand, then expect higher mortgage interest rates.

The Federal Open Market Committee (FOMC) will meet on Tuesday and Wednesday this week. While there is widespread expectation that key short-term interest rates will remain unchanged, the post-meeting statement could lead to volatility in the mortgage market. Investors will be focusing on any changes in balance sheet expansion or planned unwinding as well as comments on the status of recovery. It's expected the minutes will acknowledge recent improvements in economic activity. At the same time, it will indicate that the recovery is expected to be relatively weak and will persist for some time. If we see any significant weakness in stock markets, then investors may return to the mortgage market as a safe-haven from the volatility. This could lead to lower mortgage interest rates Wednesday afternoon.

Economic Reports to be Released This Week:

There are five relevant economic reports scheduled for release this week. However, none of the reports are considered to be highly important to the mortgage market. This should help limit significant changes in mortgage interest rates most days this week.

Monday, September 21st:

• Leading Economic Indicators (LEI) for August - released by the Conference Board, this index provides an estimate economic activity over the next three to six months, and is expected to show a 0.7% increase. This would indicate that analysts are predicting a sizable increase in economic activity over the next several months. A larger than expected reading would lead to falling prices for mortgage backed securities and an increase in mortgage interest rates.

Tuesday, September 22nd:

• There are no economic reports expected to be released today.

Wednesday, September 23rd:

• There are no economic reports expected to be released today.

Thursday, September 24th:

• Existing Home Sales Report for August - released by the National Association of Realtors, this report provides us with an indication of housing sector strength by tracking sales of existing homes, and is expected to show a moderate increase from July's sales. Unless it varies greatly from forecasts, this data is usually not considered to be very important to the mortgage market.

• Jobless Claims - New claims for unemployment are tabulated each week to show the number of individuals who filed for unemployment insurance for the first time. Analysts are predicting that 555,000 new claims for unemployment will have been filed last week. There were 545,000 new claims filed the previous week. The weekly job loss appears to have steadied just above the 550,000 level. With the high rate of people unemployed, the threat of wage based inflation remains subdued. Employers do not have to pay higher wages to attract new employees during high unemployment times as people will be happy just to have a job. This data is usually not considered to be very important to the mortgage market.
  
  
• Fed's MBS Purchase Program - The results of this week's purchases of mortgage backed securities by the Feds will be released in the afternoon. As of last Thursday, the Feds have purchased over $862 billion in mortgage backed securities this year. The Feds plan on purchasing up to $1.25 trillion in mortgage backed securities through December 31st.

Friday, September 25th:

• Durable Goods Orders for August - this report gives us an indication of manufacturing sector strength by tracking orders placed with manufacturers for immediate and future delivery of durable goods. Current forecasts call for a 1.0% increase in orders for durable goods. A smaller than expected increase could lead to an increase in prices of mortgage backed securities and a drop in mortgage rates. However, a larger than expected increase would indicate a stronger than expected manufacturing sector and could lead to higher mortgage interest rates.
  
  
• University of Michigan's Index of Consumer Sentiment Revised Reading for September - the preliminary reading that was released earlier this month was 70.2, and analysts are expecting it to remain unchanged. If it remains unchanged, this would mean that consumer confidence has not changed since the last reading. A higher than expected reading could lead to lower prices for mortgage backed securities and higher mortgage interest rates.
  
  
• New Home Sales for August - this report is expected to show that sales of newly constructed homes rose slightly in August. However, this data is usually not considered to be very important to the mortgage market.

How do Economic Data Releases Affect Mortgage Interest Rates?

One of the most important things for you to know when deciding when to lock in the interest rate on your mortgage is knowing what economic data is going to be released - and when - and how it may impact the mortgage market and mortgage interest rates.

While an in depth review of an economic event can help you make an informed decision, understanding the nuances of a release can't help you if you don't know when it's happening. Economic data releases are important because they provide a snapshot of what's happening in the economy. They also provide a foreshadowing of any upcoming market volatility. It's just as important to know when these data releases are happening as knowing what effect these releases can have on the mortgage market.

Recent Mortgage Interest Rate Activity:

The chart below shows the upward trend in the price of the FNMA 30-Year 4.5% coupon over the past two weeks:

The graph below shows the upward trend in the price of the FNMA 30-Year 4.5% coupon over the past 30 days (white line) as well as its 30 day moving average (green line):

Remember - as the prices of mortgage backed securities goes down, the yields go up - and so do mortgage interest rates. Conversely, as the prices of mortgage backed securities goes up, the yields come down - and mortgage interest rates come down with it.

Mortgage Interest Rate Outlook:

Moderate Volatility. Overall, I don't believe any of this week's data has the potential to move the mortgage market or mortgage interest rates much this week. The Durable Goods Orders report is the single most important report of the week. However, the most important day will probably be the release of the minutes from the FOMC meeting and the results of the 5-year Note auction Wednesday afternoon. Thursday's 7-year Note sale is actually a little more important for mortgage rates than Wednesday's auction but the first of the two will give us an idea of what to expect from Thursday's sale. We may some change in mortgage interest rates every day, with the biggest changes most likely occurring the last three days of this week.

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