What the Mortgage Backed Securities Market is Doing Today:
The FNMA 30-Year 4.5% MBS opened down 2/32 this morning to 100.55.
The price of the FNMA 30-Year 4.5% coupon closed up 3/32 on Friday to 100.61 (as shown by the white line). MBS fell as much as 7/32 this morning to 100.45, but 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 down, the yield goes up - and so do mortgage interest rates. I expect that mortgage rates will be 0.125% - 0.25% worse in price this morning as compared to Friday's close.
Economic Reports for Today:
- There are no economic reports scheduled for release today.
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 today, 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 this 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, tomorrow and Wednesday. 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.
The week's corporate earnings also have the potential to heavily influence bond trading and mortgage rates via stock market swings. If the major corporate earnings reports show better than expected results, we can expect to see the major stock indexes rally. This would lead to a shift of funds from bonds to stocks and cause bond prices to fall and yields (and mortgage rates) to rise. If we get weaker than expected results from the key corporations, that would lead to a sell off in stocks and (hopefully) a rally in the bond market.
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
- Lock 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