The Mortgage Interest Rate Lock Advisory for Chatham MA for December 22, 2009
Here are some of the events affecting mortgage interest rates today in Chatham, MA.
What the Mortgage Backed Securities Market is Doing Today:
Prices of Mortgage Backed Securities Continue Free Fall in Massive Sell Off
Mortgage Interest Rates Are Rising - and Fast!
The price of the FNMA 30-Year 4.5% MBS coupon opened at 100.56 this morning - the same as yesterday's close.
The 4.5% MBS coupon is currently trading at 100.06 - down 16/32 from its opening this morning. 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 interest rates will be 0.125% - 0.375% worse in price this morning as compared to yesterday.
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- Final Revision to the 3rd Quarter GDP - the economic recovery is not as strong as earlier believed. GDP grew at an annualized rate of 2.2% in the 3rd quarter, less than expected. Analysts expected the GDP report to show an annualized growth rate of 2.7%. Last month's first revision showed that the economy expanded at a 2.8% annualized rate. This data usually does not have an impact on the mortgage market unless it varies greatly from forecasts.
- Existing Home Sales Report for November - existing home sales jumped 7.4% to an annualized rate of 6.54 million, the best since February 2007, and much more than expected. Analysts expected the report to show an annualized rate of 6.25 million. In October, existing homes sold at an annualized rate of 6.10 million. Released by the National Association of Realtors (NAR), this report will provide us with a measurement of housing sector strength and mortgage credit demand. This data usually does not have an impact on the mortgage market; however, mortgage interest rates continued rising this morning on the news.
Moderate to High Volatility - Mortgage interest rates are rising because of increasing fears of inflation. The sentiment is the health care bill will add hundreds of billions of dollars more to the already massive federal deficits. There's increasing concerns that the Fed will have to begin increasing short term interest rates and tighten monetary policy sooner than later.
The bond and mortgage markets will close early Thursday and will be closed all day Friday in observance of Christmas Day. This means that trades in mortgage backed securities will light during the latter part of the week. This raises the possibility of stronger reactions to surprises in the mortgage market from economic data than we normally would see.
There's not much room for MBS prices to move higher or for mortgage interest rates to move lower at the moment. Mortgage interest rates are still at historic lows. 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
- Lock if my closing was taking place between 31 and 45 days
- Lock 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 Chatham, MA.
East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB