The Mortgage Interest Rate Lock Advisory for Lexington MA for November 2, 2009
Here are some of the events affecting mortgage interest rates today in Lexington, MA.
What the Mortgage Backed Securities Market is Doing Today:
The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.09 this morning - down 3/32 from Friday's close.
The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:
The FNMA 30-Year 4.5% MBS coupon is currently trading at 101.06 - down 1/32 from its opening. Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage interest rates. I expect that mortgage interest rates will be about the same in price this morning as compared to Friday.
The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:
Recent Activity in Mortgage Backed Securities:
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- Institute for Supply Management for October - the index increased more than 3 points from 52.6 in September to 55.7 for October. Analysts were expecting a reading of 53.0. This index measures manufacturer sentiment, on employment, production, new orders, supplier deliveries, and inventories. A reading above 50.0 indicates an expanding factory sector. This indicates that more manufacturers are reporting they are expanding rather than contracting. However, this report had no impact on the mortgage market or mortgage interest rates this morning.
In other news, construction spending jumped 0.8% in September, much more than the 0.2% decline that was expected, and follows a 0.8% increase in August. The spending increase was led by a 3.8% surge in private residential outlays. However, private nonresidential spending fell 1.8%.
The pending home sales index rose 6.1% in September to its highest level in almost three years. According to the National Association of Realtors (NAR), "The Pending Home Sales Index, a forward-looking indicator based on contracts signed in September, rose 6.1 percent to 110.1 from a reading of 103.8 in August, and is 21.2 percent higher than September 2008 when it stood at 90.9. The gain from a year ago is the largest annual increase on record, and the index is at the highest level since December 2006 when it was 112.8."
According to Lawrence Yun, the chief economist at NAR, the momentum is understandable. "What we're witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month," he said. "Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery."
What's Happening With Mortgage Interest Rates Today:
Low to moderate volatility. Overall, this week's economic reports and the FOMC meeting will cause volatility to the stock markets which in will have an impact on trading of mortgage backed securities. If you have not yet locked in your mortgage interest rate, please proceed with caution and maintain contact with your mortgage professional.
My Mortgage Interest Rate Lock Advice for Today:
If I were considering financing/refinancing a home, I would...
- Lock if my closing was taking place within the next 7 days
- Float if my closing was taking place between 8 and 30 days
- Float if my closing was taking place between 31 and 45 days
- Float if my closing was taking place between 46 and 60 days
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.
Get the best available mortgage interest rates for your situation in Lexington, MA!
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