Mortgage Rate Forecast: The Mortgage Interest Rate Lock Advisory for Barnstable MA for February 5, 2010

The Mortgage Interest Rate Lock Advisory for Barnstable MA for February 5, 2010

Here are some of the events affecting mortgage interest rates today in Barnstable, MA.

What Mortgage Backed Securities Are Doing Today:

• The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.25 this morning - the same as yesterday's close.
  
  
• The 4.5% MBS coupon was up as high as 101.41 this morning, but reversed course on the employment situation report this morning. The 4.5% MBS coupon is now down 4/32 from its opening, and is down 9/32 from its high.

Price Trend in Mortgage Backed Securities:

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days from 1-5-2010 to 2-4-2010:

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% - 0.25% worse in price this morning as compared to yesterday.

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

• Employment Situation Report for January - according to the Bureau of Labor Statistics, non-farm payroll fell by 20,000 in January, and is worse than expected. Analysts expected a gain of 5,000 jobs. This follows a revised loss of 150,000 jobs in December, a revised gain of 64,000 jobs in November and a revised loss of 224,000 jobs in October. Meanwhile, the unemployment rate fell to 9.7%, less than the 10.1% rate that was expected. The unemployment rate stood at 10.0% in November and December. This data had a negative impact on the mortgage market this morning as prices of mortgage backed securities fell on the news. This lead to higher mortgage interest rates this morning.

What's Happening With Mortgage Interest Rates Today:

Moderate to High Volatility. Mortgage interest rates are still at historic lows. There's not much potential for MBS prices to tick higher (lower mortgage rates) as the Fed begins winding down their stimulus programs soon as it appears the overall economy is improving. There's also the fear of inflation.

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. It's better to have locked when you should have floated than it is to float when you should have locked.

Mortgage interest rates are generally holding at currently levels. If you have not yet locked in your mortgage interest rate yet, please proceed with caution and maintain contact with your mortgage professional as mortgage interest rates can change for the worse.

Get current mortgage interest rates for your situation in Barnstable, MA.