The Bridgewaters, Massachusetts

Mortgage Rate Forecast for June 28, 2010

Here are some of the events affecting mortgage rates today:

What Mortgage Backed Securities (MBS) Are Doing Today:

• The price of the FNMA 30-Year 4.0% MBS coupon opened at 100.78 this morning - the same as Friday's close.
  
  
• At 9:30 AM, the 4.0% MBS coupon was trading at 101.09 - up 10/32 from its opening.

Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and so do mortgage rates. I expect that mortgage rates will be up to 0.250 points better in price this morning as compared to Friday.

Price Trend in Mortgage Backed Securities:

The chart below shows the price trend of the FNMA 30-Year 4.0% coupon over the past 30 days from 5-29-2010 to 6-28-2010:

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

• Personal Income and Outlays Report - there was a 0.4% increase in personal income in May, slightly less than expected, and mainly due to lower gasoline prices. This follows a gain of a gain of 0.4% in April, a 0.3% gain in March, and a 0.1% gain in February. Year-over-year, personal income is up 1.6%.
  
  Consumer spending was up 0.2% in May, more than expected, and follows no change in April. Overall, the consumer sector is slowly gaining strength in terms of spending power. Inflation is still almost nonexistent as the core Personal Consumption Expenditures (PCE) index is up only 0.2%.
  
  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 rates. This report had no impact on mortgage rates this morning.

Trend in Mortgage Rates:

The chart below shows the trend in mortgage rates over the past year:

Mortgage Rate Lock Advice:

Mortgage rates are still at historic lows, and have not been this low since 1953. Bear in mind that mortgage rates could go even lower, but most likely it won't be by much as the European, Chinese and Japanese markets are showing signs of improvements. However, the US continues on its deficit spending spree, and is causing consternation among the other members of the G8. In any case, I would not risk the chance waiting for lower mortgage rates.

If I was closing within the next 5 - 7 days, I would lock in the rate.

If you are closing in more than 7 days, send me an email to get my rate lock advice.

Be sure to check out today's mortgage rates.