Mortgage Rate Forecast for Bourne MA for February 24, 2010
Here are some of the events affecting mortgage rates today in Bourne, MA.
What Mortgage Backed Securities Are Doing Today:
- The price of the FNMA 30-Year 4.5% MBS coupon opened at 100.81 this morning - the same as yesterday's close.
- At 9:30, the 4.5% MBS coupon was trading at 100.69 - down 4/32 from its opening.
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 1-25-2010 to 2-24-2010:
Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage rates. I expect that mortgage rates will be 0.125% - 0.250% worse in price this morning as compared to yesterday.
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- New Home Sales - fell 11.2% in January to an annualized rate of 309,000 homes. Analysts were expecting a 3.7% increase to an annualized rate of 360,000. In December, new homes sold at an annualized rate of 342,000. Median prices of new homes fell 5.6% to $203,500. Meanwhile, the inventory of new homes on the market jumped to 9.1 months, reversing eight months of improvement. This also shows that housing demand remains weak with no buyer urgency as home prices continue to fall. While fairly significant, this data did not have much of an impact on the mortgage market this morning as we await Ben Bernanke's testimony before Congress today.
In other news, Ben Bernanke, Chairman of the Federal Reserve, will deliver his Semi-annual Monetary Policy Report before the House Committee on Financial Services today and before the Senate Banking Committee tomorrow. Look for him to specifically address the unemployment situation as well as the housing crises and the impact they have on the overall economy. His testimony could have an impact on mortgage rates today and tomorrow.
Watch Sebastien Barbe, head of emerging market research & strategy at Credit Agricole CIB on MSNBC discuss how Bernanke's upcoming congressional testimony could affect the value of the dollar:
The Treasure Dept. will be auctioning $42 billion in 5-Year Notes today. The Notes and Bonds are used to finance the massive government debt. If there is a strong demand for the Notes, we should see the bond market move higher (resulting in lower mortgage rates) during afternoon trading. However, a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to a broader selling in bonds and mortgage backed securities. The selling of mortgage backed securities could result in higher mortgage rates this afternoon.
What's Happening With Mortgage Interest Rates Today:
Moderate to High Volatility. Mortgage rates are again off their historic lows. It appears that the overall economy is improving. The Fed raised the discount rate last week by a 1/4 point. Also, the Fed continues to auction Treasury Notes and Bonds to pay for the increasing massive government debt, all of which contributes to the fear of inflation. In addition, the Fed is winding down their purchases of mortgage backed securities which is slated to end on March 31st. As such, there's very little potential for lower mortgage rates.
Mortgage rates fell yesterday on the decline in consumer confidence. If you have not yet locked in your mortgage rate yet, please proceed with caution and maintain contact with your mortgage professional as mortgage rates can change for the worse - often without notice.
If you're happy with the interest rate being offered to you and if you don't want to risk mortgage rates moving higher, then 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.
Get current mortgage rates for Bourne, MA.
East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB