Mortgage Rate Forecast for September 24, 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 102.84 this morning - the same as yesterday's close.
- At 9:30 AM, the 4.0% MBS coupon was trading at 102.63 - down 7/32 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 0.375 points worse in price this morning as compared to yesterday afternoon.
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 8-25-2010 to 9-24-2010:
Economic Reports, News, and Events Affecting Mortgage Rates Today:
- Durable Goods Orders Report - new durable goods orders fell 1.3% in August, and is worse than expected. This follows a 0.7% increase in July. However, when the transportation component is excluded, new durable goods orders actually rose 2.0% after falling 2.8% in July - indicating that manufacturing is showing some broad-based strength. Year-on-year, overall new orders for durable goods are up 11.2%, and follows a 9.3% increase in July. Excluding transportation, new orders for durable goods are up 12.9% Year-on-year. This data is usually not considered to be very important to the mortgage market, but led to higher pricing on mortgage rates this morning as investors pulled money out of bonds and poured it into the stock markets.
- New Home Sales - remained flat at an annualized rate of 288,000 homes - 2,000 less than expected. New home sales rose 4.8% in July to a revised annualized rate of 288,000 homes. In addition, the inventory of new homes on the market fell to a 42 year low, and currently stands at an 8.9 month supply. And, the average price of new homes fell 0.6% to a median price of $204,700. This data is usually not considered to be very important to the mortgage market, and had no impact on mortgage rates this morning.
In other news, the Treasury Dept will be auctioning $36 billion in 2-Year notes, $35 billion in 5-Year notes, and $29 billion in 7-Year Notes for a total of $78 billion next week. The Notes and Bonds are used to finance the massive government debt. The results of these auctions could affect mortgage rates next week.
Trend in Mortgage Rates:
The chart below shows the trend in mortgage rates over the past 20 years:
Mortgage Rate Forecast:
Mortgage rates are off their historic lows as the overall economic outlook is beginning to improve. Given the most recent economic and job reports, it now appears that mortgage rates are as low as they will ever go.
If you're thinking about refinancing your mortgage and if these low mortgage rates make sense to you, then take advantage of them while you can. 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!
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