Mortgage Rate Forecast for Falmouth MA for February 26, 2010
Here are some of the events affecting mortgage rates today in Falmouth, MA.
What Mortgage Backed Securities Are Doing Today:
- The price of the FNMA 30-Year 4.5% MBS coupon opened at 100.91 this morning - down 2/32 from yesterday's close.
- At 9:30, the 4.5% MBS coupon was trading at 101.06 - up 5/32 from its opening.
Price Trend in Mortgage Backed Securities:
The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days from 1-27-2010 to 2-26-2010:
Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and so do mortgage rates. I expect that mortgage rates will be 0.125% - 0.250% better in price this morning as compared to yesterday.
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- First Revision to the 4th Quarter Gross Domestic Product (GDP) - the GDP in the 4th Quarter of 2009 grew at an annualized rate of 5.9%, the highest in 7 years. While this is good news, the growth is not expected to last. The increase in GDP is due primarily to an increase in inventories that were depleted last year, not from increased consumer spending. So far, this has been a jobless recovery, and unemployment in recent weeks has been increasing. As confidence remains low and unemployment remains high, it's not expected that consumers will be purchasing more goods again any time soon. While significant, the data usually does not have an impact on the mortgage market or mortgage rates unless it varies greatly from forecasts.
- University of Michigan's Index of Consumer Sentiment - a reading this morning of 73.6 indicates that consumer sentiment fell 7% this month. The reading was 74.4 in January. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates. While this report indicates that consumers are less likely to make purchases, it had no impact on the mortgage market this morning.
- Existing Home Sales Report - released by the National Association of Realtors (NAR), this report will provide us with a measurement of housing sector strength and mortgage credit demand. Existing home sales fell 7.2% in January, and follows a decline of 16.7% in December. Existing home sales fell to an annualized rate of 5.05 million in January, down from the annualized rate of 5.45 million in December. Meanwhile, the inventory of homes for sale increased from 6.5 months to 7.2 months. While significant, this data usually does not have an impact on the mortgage market.
What's Happening With Mortgage Interest Rates Today:
Moderate to High Volatility. Mortgage rates are again off their historic lows. It appears that the overall economy is improving. The Fed raised the discount rate last week by a 1/4 point. Also, the Fed continues to auction Treasury Notes and Bonds to pay for the increasing massive government debt, all of which contributes to the fear of inflation. In addition, the Fed is winding down their purchases of mortgage backed securities which is slated to end on March 31st. As such, there's very little potential for lower mortgage rates.
If you have not yet locked in your mortgage rate yet, please proceed with caution and maintain contact with your mortgage professional as mortgage rates can change for the worse - often without notice.
If you're happy with the interest rate being offered to you and if you don't want to risk mortgage rates moving higher, then you should apply and lock in today. It's better to have locked when you should have floated than it is to float when you should have locked.
Get current mortgage rates for Falmouth, MA.
East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB