Mortgage Rate Forecast for Massachusetts for April 22, 2010
Here are some of the events affecting mortgage rates today in Massachusetts:
What Mortgage Backed Securities Are Doing Today:
- The price of the FNMA 30-Year 4.5% MBS coupon opened at 100.47 this morning - the same as yesterday's close.
- At 9:30 AM, the 4.5% MBS coupon was trading at 100.50 - up 1/32 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 3-23-2010 to 4-22-2010:
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 about the same in price this morning as compared to yesterday.
Economic Reports, News, and Events Affecting Mortgage Interest Rates in Massachusetts Today:
- Jobless Claims - 456,000 new claims for unemployment were filed last week, the first decline in three weeks. This is 4,000 less claims for benefits than expected, and 28,000 less than the previous week. The four-week average for unemployment is up by 3,500 to 460,250. Continuing claims for the week of April 10 fell by 40,000 to 4.646 million. All signs indicate the economy has been recovering of late - but without an increase in jobs. This data is usually not considered to be very important to the mortgage market and had no effect on mortgage rates this morning.
- Producer Price Index (PPI) - rose 0.7% in March, and is a reversal from the 0.6% decline in February. This means that prices paid at the producer level rose more than thought. The increase in the PPI was attributed mostly to an increase in food and energy costs. At the core level, the PPI remained steady at an increase of just 0.1%. The core level excludes the more volatile food and energy prices. Rising prices increases the fear of inflation and tends to have a negative impact on the mortgage market. While significant, this report had no impact on mortgage rates this morning as the core rate came in as expected.
- Existing Home Sales Report - released by the National Association of Realtors (NAR), this report provides us with a measurement of housing sector strength and mortgage credit demand. Existing home sales increased 6.8% in March to an annualized rate of 5.35 million homes, the highest level since December. Analysts were expecting a 5.2% increase. Existing home sales are up 16.1% from a year ago. First-time home buyers made up 44% of all home sales, while distressed homes made up 36% of the total sales. 27% of all homes were sold for cash. In addition, the inventory of unsold homes decreased to an 8.0 month supply. This shows that the housing market may be stabilizing, but the homebuyer tax credit could be having an impact on the surge in home sales. While significant, this report had no impact on the mortgage market or mortgage rates this morning.
In other news, the Treasury Dept will announce later this morning the terms of the Notes and Bond auctions scheduled for next week. The Notes and Bonds are used to finance the massive government debt, and the results of these auctions could result in higher mortgage rates next week.
What's Happening With Mortgage Interest Rates in Massachusetts Today:
Moderate to High Volatility. Mortgage rates are off their historic lows, and while they rose significantly a couple of weeks ago, they have since come back down a bit. But this may be temporary.
The overall economy is improving without any increase in jobs. The Fed has also ended their purchases of mortgage backed securities. In addition, the federal deficit continues to grow while demand for US debt is waning. We're also entering the prime home selling and buying season. Historically, mortgage rates rise and fall with the thermometer. Usually from this time of the year and into the summer months, as the weather warms, mortgage rates rise.
As such, there's little or no potential for lower mortgage rates anytime soon. If you're happy with the interest rate being offered to you today and if you don't want to risk mortgage rates moving higher, then you should apply and lock in now. It's better to have locked when you should have floated than it is to float when you should have locked.
If I were applying for a mortgage today, I would lock in my rate. However, if I were to continue floating my rate, I would proceed with caution and maintain contact with my mortgage professional. I would be ready to lock in at a moment's notice as mortgage rates can continue to change for the worse.
Be sure to check out the current Massachusetts mortgage rates.
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East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB