Professional Home Staging and Photography Blog: The Daily Mortgage Interest Rate Lock Advisory - April 28, 2009

The Daily Mortgage Interest Rate Lock Advisory - April 28, 2009

What the Markets Are Doing Today:

The bond and Mortgage Backed Securities opened in slightly positive territory while the stock markets opened in negative territory again this morning despite a stronger than expected economic report.

  • The Dow opened down 71 points from yesterday's close
  • NASDAQ opened down 15 points from yesterday's close
  • The 10 Year Treasury Bond opened up 10/32 from yesterday's close
  • FNMA 30 Year 4.0% coupon up 3/32 from yesterday's close

Remember, on MBSs, as the price goes up, the yield goes down - and mortgage interest rates go down with it. Conversely, as the price goes down, the yield goes up - and so do mortgage interest rates. MBS closed up 18/32 from its opening yesterday and is currently flat against yesterday's close. I expect that today's mortgage rates will improve by 0.125 - 0.25 in discount points today.

Economic Reports Being Released Today:

  • Consumer Confidence Index (CCI) for April - According to the Conference Board, the CCI for April jumped to 39.2. This is a much stronger than the 29.9 reading that was expected. That indicates that consumers were much more optimistic about their own personal financial situations than many previously thought. A higher level of confidence means that consumers are much more likely to make larger purchases in the near future. This morning's report had a slight negative impact on the bond markets.

Important News of the Day:

The Federal Open Market Committee (FOMC) meeting begins today and will adjourn early tomorrow afternoon. Analysts do not expect any change in the key short-term interest rates. However, we may see some volatility in the markets following the ost-meeting press release at 2:15 PM ET.

This week will be very active in terms of economic releases scheduled for release for the remaining days of the week - including another FOMC meeting. Look for more details on this week's economic data releases and events on my Weekly Mortgage Market Watch.

What Happening With Mortgage Rates Today:

Moderate Volatility. Look for plenty of movement in the financial markets and mortgage rates this week. Wednesday will likely be the most important day of the week with the release of the Gross Domestic Product (GDP) report as well as the adjournment of the Federal Open Market Committee (FOMC) meeting. We may also see noticeable changes in mortgage rates tomorrow and Friday. If the reports being released this week reveal weaker than expected economic conditions, the bond markets may rally and mortgage rates could fall.

There's still continued downward pressure on MBS prices (which means higher yields and mortgage rates). The supply of bonds and T-bills on the market continues to weigh heavily on the market. The government expects to issue between $2.7 trillion and $4.2 trillion in bonds over the next two years to pay for the massive debt obligations. That in and of itself may give rise to the concerns for inflation.

No one knows how long rates will stay down this time or if they'll go any lower. If you haven't locked in a rate yet, then you may want to continue floating. While floating continues to make sense right now, the ever increasing massive government debt could soon drive mortgage rates up. So, if you like the rate that you are being offered today, then there's nothing wrong with locking in.

My Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

  • Float if my closing was taking place within 7 days
  • Float if my closing was taking place within 8 and 30 days
  • Float if my closing was taking place between 31 and 60 days
  • Float if my closing was taking place over 60 days from now

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. See today's mortgage rates at


East Bridgewater, MA 02333
Phone: (508) 443-1332

Lew Corcoran, ASP®, IAHSP, IAHSP-CB
Accredited Home Staging Professional
Professional Real Estate Photographer

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Comment balloon 1 commentLew Corcoran, ASP® • April 28 2009 11:21AM


I had a client lock in a 15 year yesterday for 4.375%.  As far as I'm concerned, that's like free money.

Posted by Wayne Weaver (ERA Team VP Real Estate) almost 10 years ago

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