The Mortgage Interest Rate Lock Advisory for Harwich MA for November 25, 2009
Here are some of the events affecting mortgage interest rates today in Harwich, MA.
What the Mortgage Backed Securities Market is Doing Today:
The price of the FNMA 30-Year 4.5% MBS coupon opened at 102.31 this morning - the same as yesterday's close.
The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:
The FNMA 30-Year 4.5% MBS coupon is currently trading at 102.31 - the same as it's opening. Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and mortgage interest rates come down with it. I expect that mortgage interest rates will be about the same in price this morning as compared to yesterday.
Recent Activity in Mortgage Backed Securities:
The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- Durable Goods Orders fro October - new orders for durable goods fell 0.6% in October, and is much worse than the 0.5% increase that was expected. This follows a 1.0% increase in September. This data helps us measure manufacturing strength by tracking orders for big-ticket items, but is known to be quite volatile from month-to-month. This report will help the mortgage market keep mortgage interest rates down this morning.
- Personal Income and Outlays Report for October - as expected, there was a 0.2% increase in income in October. There was a 0.7% increase in consumer spending, slightly more than expected. Income was unchanged the previous month while spending fell 0.5%. This data is thought to measure consumers' ability to spend and their current spending habits. This is important because consumer spending makes up two-thirds of the U.S. economy. This report had almost no impact on the mortgage market and will also help keep mortgage interest rates down this morning.
- Revised University of Michigan Index of Consumer Sentiment reading for November - the reading is up from 66.0 the previous month to 67.4. Analysts were expecting to see a reading of 67.0. The University of Michigan's Consumer Survey Center questions 500 households each month about their financial conditions and attitudes about the economy. However, this data will usually has little to no impact on the mortgage market and mortgage interest rates.
- New Home Sales Report for October - new home sales rose 6.2% in October to an annualized rate of 430,000, and is much higher than the annualized rate of 430,000 sales that were expected. This follows an annualized rate of 402,000 new home sales the previous month. In addition, the inventory of new homes on the market fell to a 6.7 month supply. This means that if no other new homes come on the market, it will take 6.7 months to sell the current inventory of homes. This data will usually has little to no impact on the mortgage market, but higher than expected new home sales drove prices of mortgage backed securities down 2/32 this morning. This should not have an impact on mortgage interest rates.
- Jobless Claims - claims for unemployment fell sharply last week to 466,000, mush less than analysts expected. It's also the lowest level since September of last year, and is less than the 505,000 filed in each of the previous 2 weeks. The four-week average fell by 16,500 to 496,500. Continuing claims for unemployment also declined - it fell by 190,000 to 5.423 million. However, the decline also reflects those whose unemployment benefits have expired. Claims for unemployment are tabulated each week to show the number of individuals who filed for unemployment insurance for the first time. With a decreasing trend in the filing of new claims for unemployment, this suggests that the labor market is improving. While encouraging, this data is usually not considered to be very important to the mortgage market.
- Fed's MBS Purchase Program - The results of this week's purchases of mortgage backed securities by the Feds will be released in the afternoon. As of last Thursday, the Feds have purchased over $1.006 trillion in mortgage backed securities this year. The Feds plan on purchasing up to $1.25 trillion in mortgage backed securities through March 31st.
In other news, the 7-year Note auction is being held today. If the auction is met with strong demand, we should see mortgage interest rates continue to stay down. However, if these auctions are met with lackluster demand, we may see an increase in mortgage interest rates this week.
What's Happening With Mortgage Interest Rates Today:
Low to Moderate Volatility. Overall, I believe that it is going to be an active week for the mortgage market. I expect to see volatility in mortgage interest rates the first three days of the week.
There's not much room for MBS prices to move higher or for mortgage interest rates to move lower at the moment. If you're happy with the rate being offered to you and don't want to risk mortgage interest rates moving higher, you should apply and lock in today. While there's still some room for MBS prices to tick higher, it's better to have locked when you should have floated than it is to float when you should have locked.
If you have not yet locked in your mortgage interest rate, please proceed with caution and maintain contact with your mortgage professional. Also, give very serious consideration to applying now and locking in before mortgage interest rates get worse.
My Mortgage Interest Rate Lock Advice for Today:
If I were considering financing/refinancing a home, I would...
- Lock if my closing was taking place within the next 7 days
- Lock if my closing was taking place between 8 and 30 days
- Float if my closing was taking place between 31 and 45 days
- Float if my closing was taking place between 46 and 60 days
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.
Get today's mortgage interest rates for your situation in Harwich, MA.
East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB