The Mortgage Interest Rate Lock Advisory for Orleans MA for December 23, 2009
Here are some of the events affecting mortgage interest rates today in Orleans, MA.
What the Mortgage Backed Securities Market is Doing Today:
The price of the FNMA 30-Year 4.5% MBS coupon opened at 100.06 this morning - the same as yesterday's close.
The 4.5% MBS coupon is currently trading at 100.25 - up 6/32 from its opening this morning. 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 0.00% - 0.125% better in price this morning as compared to yesterday.
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- Personal Income and Outlays data for November - there was a 0.4% increase in income, more than October, and a 0.5% increase in spending, less than October. However, both are slightly less than expected. Analysts expected a 0.5% increase in income and a 0.6% increase in spending. This report provides us with a measurement of the consumer's ability to spend and their current spending habits. Because consumer spending makes up two-thirds of the U.S. economy, any related data usually has an impact on the mortgage market and mortgage interest rates. However, because the readings came in largely as expected, there was little impact on mortgage backed securities and mortgage interest rates this morning.
- The Revised University of Michigan Index of Consumer Sentiment for December - came in at 72.5, slightly less than the reading of 73.5 that analysts were expecting - and down from the preliminary reading of 73.4. An increase in consumer confidence indicates that consumers may be more apt to make large purchases in the near future. Because the readings came in largely as expected, there was little impact on mortgage backed securities and mortgage interest rates this morning.
- New Home Sales Report for November - new home sales plunged 11.3% in November. New home sales fell to an annualized rate of 355,000. Analysts expected the report to show an increased in new home sales to an annualized rate of 440,000. In October, new homes sold at an annualized rate of 430,000. This report provides us with another measurement of housing sector strength and mortgage credit demand. However, this data usually does not have an impact on the mortgage market.
In other news, the Treasury Dept. will announce later this morning the auctions of $118 billion in 2-Year Notes, 5-year Notes, and 7-Year Notes for next week. The ever increasing supply of Notes and Bonds continues to weigh heavily on the markets. Central bankers in China state the US cannot continue to count on foreign investors to fund the massive federal deficits.
What's Happening With Mortgage Interest Rates Today:
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
- 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 Orleans, MA.
East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB