What the Mortgage Backed Securities Market is Doing Today:
The FNMA 30-Year 4.5% MBS opened down 11/32 this morning to 100.17 but quickly recovered.
The price of the FNMA 30-Year 4.5% coupon closed down 13/32 yesterday to 100.52 (as shown by the white line). MBS is currently trading up 5/32 at 100.69 (as shown by the blue line). Remember, on mortgage backed securities (MBSs), as the price goes up, the yield goes down - and mortgage interest rates go down with it. I expect that mortgage rates will be 0.125% - 0.25% better in price this morning as compared to yesterday's close.
Economic Reports for Today:
- Goods and Services Trade Balance Report for May - This report measures the size of the U.S. trade deficit, and revealed a $26.0 billion trade deficit. Analysts were expecting to see a $28.8 billion deficit. This data is not considered to be of high importance to the bond market and had little to no impact on prices of mortgage backed securities or mortgage rates.
- University of Michigan's Index of Consumer Sentiment Preliminary Report - provided a reading of 64.6, which is well below expectations. Analysts were expecting to see a reading of approximately 70.0. This means that consumers were less optimistic about their own financial situations than many had thought. It also indicates that consumers are less willing to make large purchases anytime soon. However, this data is not considered to be of high importance to the bond market and had little to no impact on prices of mortgage backed securities or mortgage rates.
Important News of the Day:
There are a number of economic reports scheduled for release next week. While there are no reports scheduled for release on Monday, there will be a number of reports released over the remaining days of the week. The minutes from the most recent FOMC meeting will also be released next week. Look for more details on this week's economic data releases and events on my Weekly Mortgage Market Watch at www.LewCorcoran.com/MyBlog on Monday.
What's Happening With Mortgage Rates Today:
Moderate to High Volatility. Overall, I am expecting mortgage rates to be fairly active today. While the economy is still faltering, the recession may be bottoming out. It may not be a return to boom times anytime soon, but things probably won't be getting much worse, either.
If you're still floating and watching the rates, ask yourself this question: Will it hurt me more to lock in now and watch rates drop another eighth or a quarter point, or will it hurt me more to keep floating and watch rates turn for the worse? If you're willing to take the risk and continue watching rates, then keep a wary eye on the markets and maintain contact with your mortgage professional, because the markets can change at any moment.
My Interest Rate Lock Advice for Today:
If I were considering financing/refinancing a home, I would...
- Lock 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