Professional Home Staging and Photography Blog: The Mortgage Interest Rate Lock Advisory for Eastham MA for December 24, 2009

The Mortgage Interest Rate Lock Advisory for Eastham MA for December 24, 2009

The Mortgage Interest Rate Lock Advisory for Eastham MA for December 24, 2009

Here are some of the events affecting mortgage interest rates today in Eastham, 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 99.97 - down 3/32 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 essentially be 0.0% - 0.125% worse in price this morning as compared to yesterday.

Economic Reports, News, and Events Affecting Mortgage Interest Rates Today

  • Durable Goods Orders Report for November - increased 0.2%, less than the 0.5% increase that was expected, and follows a 0.6% decline in October. If order for Boeing aircraft are excluded, new durables orders increased 2.0%, following a 0.7% drop in October. This report provides us with an important measurement of manufacturing sector strength by tracking orders for big-ticket items or products that are expected to last at least three years. While the overall readings were weaker than expected, they did not have much impact on prices of mortgage backed securities this morning.

  • Jobless Claims - there were 452,000 new claims for unemployment filed last week, less than the 470,000 new claims that were expected. The four-week average declined by 2,650 to 465,250. Continuing claims also declined, and fell by 127,000 to 5.076 million. With a decreasing trend in the filing of new claims for unemployment, this suggests that the labor market is improving. While this data is usually not considered to be very important to the mortgage market, the continuing improvement in the job market had led to a decline in prices of mortgage backed securities this morning (higher costs for mortgage interest rates).

  • 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 $1.070 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 stock market will close at 1:00 PM this afternoon while the bond and mortgage markets close at 2:00 PM for the Christmas holiday.

Next week, the Feds will auction in another $118 billion in Notes: $44 billion in 2-Year Notes on Monday, $42 billion in 5-Year Notes on Tuesday, and $32 billion in 7-Year Notes on Wednesday. The auction supply will weigh heavily on the bond and mortgage markets on mounting concern that demand from foreign central banks may lessen on concerns the US federal debt is too great. This could lead to higher mortgage interest rates.

What's Happening With Mortgage Interest Rates Today:

Moderate 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 today and will be closed all day tomorrow in observance of Christmas Day. This means that trades in mortgage backed securities will light today. 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 Eastham, MA.


East Bridgewater, MA 02333
Phone: (508) 443-1332

Lew Corcoran, ASP®, IAHSP, IAHSP-CB
Accredited Home Staging Professional
Professional Real Estate Photographer

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Comment balloon 0 commentsLew Corcoran, ASP® • December 24 2009 09:25AM


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