What the Mortgage Backed Securities Market is Doing Today:
The FNMA 5.0 Coupon opened up 4/32 from Friday's close to 100.73.
The price of the FNMA 30-Year 5.0 coupon closed up 14/32 (white line) from its opening on Friday, and is currently up 21/32 (blue line) to 101.28. 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. I expect that mortgage rates today will improve by 0.25 - 0.375 in discount points from Friday's opening.
Economic Reports Being Released Today:
- There are no economic reports scheduled for release today.
Important News of the Day:
The are no government auctions of T-bills, notes and bonds this week. The Treasury will have more auctions for the 2 year, 5 year & 7 year notes on June 23 - 25. On economic news, there are more indications that this recession is not yet over and still months away from any recovery. This will help keep mortgage rates down this week.
On Wednesday, the Tim Geithner, Secretary of the Treasury, will announce plans to overhaul regulation and supervision of the financial sector.
A number of economic reports are due out this week that can influence bond trading and mortgage pricing. Look for more details on next week's economic data releases and events on my Weekly Mortgage Market Watch.
What Happening With Mortgage Rates Today:
Moderate Volatility. For a brief overview of what happened in the MBS markets yesterday, please read my Daily Interest Rate Lock Advisory.
Overall, look for Tuesday and Wednesday to be the busiest days for bonds and mortgage rates as the PPI and CPI reports are released. There is a pretty good possibility of seeing mortgage rates change several times this week, so please proceed cautiously if still floating an interest rate.
In addition, the spring and summer home buying season is upon us. Mortgage rates historically climb this time of year before peaking in July or August. If you haven't locked in a rate yet, then you may want to consider doing so. Floating is making more sense in the short term right now as the markets recover from the dramatic sell off the last couple of weeks, but the ever increasing massive government debt as well as the spring and summer home buying season could soon drive mortgage rates up even more. So, if you like the rate that you are being offered today, then there's nothing wrong with locking in. Otherwise keep an eye on the markets and maintain contact with your mortgage professional. The markets can change at any moment.
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 www.LewCorcoran.com/RateSheet.
East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB