Mortgage Rate Forecast for May 13, 2010
Here are some of the events affecting mortgage rates today:
What Mortgage Backed Securities Are Doing Today:
- The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.06 this morning - the same as yesterday's close.
- At 9:30 AM, the 4.5% MBS coupon was trading at 101.28 - up 7/32 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 or more better 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 4.5% coupon over the past 30 days from 4-13-2010 to 5-13-2010:
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- Jobless Claims - remained steady just below the 450,000 mark. 444,000 new claims for unemployment were filed last week, 4,000 more than expected, but 4,000 less than the upwardly revised 448,000 claims filed the previous week. The four-week average for unemployment is down by 9,000 to 450,500. Continuing claims for the week of May 1 rose slightly to 4.627 million. All signs indicate the economy has been recovering of late, and that companies are now laying off fewer workers. 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 European Central Bank (ECB) and International Monetary Fund (IMF) developed a $962 billion (750 billion euros) bailout plan over the weekend to prop up the Euro, and to purchase government and private debts of troubled European countries. Many investors initially doubted the bailout plan is sufficient to contain the debt crisis in Europe, but are now growing in confidence that it will. could result in higher mortgage rates soon.
The Treasury Dept. will be auctioning $16 billion in 30-Year Bonds today. The Bonds 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 year:
Should You Lock Your Mortgage Rate Today, or Should You Float?
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Be sure to check out today's mortgage rates.
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