Trend and Forecast in Mortgage Rates on July 26, 2010 - Improving, or...?
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 101.75 this morning - the same as Friday's close.
- At 9:30 AM, the 4.0% MBS coupon was trading at 101.88 - up 4/32 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 0.125 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 6-26-2010 to 7-26-2010:
Economic Reports, News, and Events Affecting Mortgage Rates Today:
- New Home Sales - rose more than 23% in June to an annualized rate of 330,000 homes - 20,000 more than expected - after falling more than 36% in May. Analysts were expecting to see an annualized rate of 310,000 homes. In addition, the inventory of new homes on the market fell to a 7.6 month supply. And, the average price of new homes fell 1.4% to $213,400. Normally, this data did not have much of an impact on the mortgage market this morning.
Trend in Mortgage Rates:
The chart below shows the trend in mortgage rates over the past 3 years:
Mortgage Rate Forecast:
Mortgage rates are at their historic lows - they haven't been this low since the early 1950s. They could possibly go even lower as the global economic crisis continues. However, the stock market is over sold while the bond market is over bought. It also appears that banks in Europe are not as bad off as previously thought. Mortgage rates could head up soon as the markets begin to correct themselves. As such, I would not risk the chance waiting for lower mortgage rates.
If you're happy with the mortgage 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.
Are you in need of a mortgage to purchase a home? Or want to refinance an existing mortgage into a lower permanent fixed rate? Or want to take cash out of the equity of your home? Or consolidate debt and reduce the monthly bills? Then be sure to request a mortgage rate quote today!
East Bridgewater, MA 02333
Lew Corcoran, ASP®, IAHSP, IAHSP-CB