Professional Home Staging and Photography Blog: The Daily Mortgage Interest Rate Lock Advisory - March 24, 2009

The Daily Mortgage Interest Rate Lock Advisory - March 24, 2009

What the Markets Are Doing Today:

Prices of bonds and mortgage backed securities opened down (yields up). Stocks also opened down this morning. There are no economic reports due out today.

  • The Dow opened down 100 points from yesterday's close
  • NASDAQ opened down 24 points from yesterday's close
  • The 10 Year Treasury Bond opened down 15/32 from yesterday's close
  • FNMA 30 Year 4.5% coupon opened down 3/32 from yesterday's close

Remember, on MBSs, as the price goes up, the yield goes down - and mortgage interest rates go down with it. Conversely, as the price goes down, the yield goes up - and so do mortgage interest rates. MBS closed down 2/32 from its opening on yesterday, but is currently down 3/32 this morning. I expect mortgage rates will remain essentially unchanged in pricing from yesterday's close.

Economic Reports Being Released Today:

  • There are no economic reports scheduled for release today.

Important News of the Day:

Ben Bernanke, Chairman of the Federal Reserve, Tim Geithner, and Secretary of the Treasury, will be testifying before the House Financial Services Committee today. On tap is AIG and the recent programs that were announced over the past few days.

There are economic reports scheduled for release in each of the remaining days this week, but none are considered to be of extreme importance. Look for more details on this week's economic data releases and events on my Weekly Mortgage Market Watch.

What Happening With Mortgage Rates Today:

Moderate Volatility. Trader's are currently taking profits after last week's rally in the bond markets and yesterday's rally in the stock markets. Traders are also taking the opportunity to reposition their portfolios and prepare for the economic data that is scheduled for release over the next few weeks.

There's still continued downward pressure on MBS prices (which means higher yields and mortgage rates). The supply of bonds and T-bills on the market continues to weigh heavily on the market. The government expects to issue between $2.7 trillion and $4.2 trillion in bonds over the next two years to pay for the massive debt obligations. That in and of itself may give rise to the concerns for inflation.

No one knows how long rates will stay down this time or if they'll go any lower. If you haven't locked in a rate yet, then you may want to continue floating. While floating continues to make sense right now, the ever increasing massive government debt could soon drive mortgage rates up. So, if you like the rate that you are being offered today, then there's nothing wrong with locking in.

My Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

  • Float if my closing was taking place within 7 days
  • Float if my closing was taking place within 8 and 30 days
  • Float if my closing was taking place between 31 and 60 days
  • Float if my closing was taking place over 60 days from now

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.

 

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 0 commentsLew Corcoran, ASP® • March 24 2009 11:03AM

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