Professional Home Staging and Photography Blog: Trend and Forecast in Mortgage Rates on July 29, 2010 - Improving, or...?

Trend and Forecast in Mortgage Rates on July 29, 2010 - Improving, or...?

Trend and Forecast in Mortgage Rates on July 29, 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 102.09 this morning - the same as yesterday's close.

  • At 9:30 AM, the 4.0% MBS coupon was trading at 101.97 - down 4/32 from its opening.

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 up to 0.125 points worse in price this morning as compared to yesterday.

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 6-29-2010 to 7-29-2010:

The price trend of the FNMA 30-Year 4.0% coupon from 6-29-2010 to 7-29-2010

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

  • Jobless Claims - 457,000 new claims for unemployment were filed last week, 3,000 less than expected, and 11,000 less than the upwardly revised 468,000 claims filed the previous week. The four-week average for unemployment is fell by 4,500 to 452,500 while continuing claims for the week of July 17 rose by 81,000 to 4.565 million. All signs indicate the economy has been recovering of late, but the jobless rate remains stubbornly high. This data is usually not considered to be very important to the mortgage market and had no effect on mortgage rates this morning.

In other news, the Treasury Dept. will be auctioning $29 billion in 7-Year Notes today. The Notes 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.

Trend in Mortgage Rates:

The chart below shows the trend in mortgage rates over the past 3 years:

The trend in mortgage rates from July 22, 2009 to July 22, 2010

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
Phone: (508) 443-1332

Lew Corcoran, ASP®, IAHSP, IAHSP-CB
Accredited Home Staging Professional
Professional Real Estate Photographer

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Comment balloon 2 commentsLew Corcoran, ASP® • July 29 2010 09:51AM

Comments

Interesting how some things effect the mortgage rates and others don't...who knows!!!

Posted by Jennifer Dulmaine, Seth Campbell Realty Group (Keller Williams Realty) about 8 years ago

Jennifer - there's a lot of things that affect mortgage rates. But the most imporant factor is investor sentment, and we can never know what they're thinking or how they feel. Still, these are fantastic rates - rates that I would be taking advanatge of as they have not been this low (if not lower) since the early 1950s!

Posted by Lew Corcoran, ASP®, Home Stager & Real Estate Photographer (Scena Home Staging & Decora Photography) about 8 years ago

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