The Mortgage Interest Rate Lock Advisory for Chelsea MA for October 15, 2009

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The Mortgage Interest Rate Lock Advisory for Chelsea MA for October 15, 2009

Here are some of the events affecting mortgage interest rates today in Chelsea, Massachusetts.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.61 this morning - down 7/32 from yesterday's close.

The price trend of the FNMA 30 Year 4.5% Mortgage Backed Security (MBS) on October 15, 2009

The FNMA 30-Year 4.5% MBS coupon is currently trading at 100.50 - 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 interest rates. I expect that mortgage interest rates will be 0.25% - 0.50% worse in price this morning as compared to yesterday.

The price trend of the FNMA 30-Year 4.5% coupon from 9-16-2009 to 10-15-2009

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

  • Consumer Price Index (CPI) for September - the overall CPI index as well as the core date reading rose of 0.2% last month - slightly better than expected. There was a 0.4% in the overall index and 0.1% rise in the core data reading in August. This is one of the most important reports that the mortgage backed securities market gets every month. The CPI is a measure of the average price level of a fixed basket of goods and services purchased by consumers, and measures inflationary pressures at the consumer level of the economy. Higher than expected readings raises concerns about inflation. As such, a larger than expected increase in the core reading drove mortgage interest rates higher this morning.

  • Jobless Claims - 514,000 new claims for unemployment were filed last week, down from 521,000 filed the previous week, and is the lowest since the beginning of this year. Analysts were predicting that 520,000 claims would have been filed. The weekly job loss continues to decline, and the 4 week average is down 8,000 to 531,500. In addition, continuing claims for unemployment fell 75,000 to 5.992 million. The declining trend in unemployment indicates that the job market is beginning to improve. However, this data is usually not considered to be very important to the mortgage market.

  • Fed's MBS Purchase Program - The results of this week's purchases of mortgage backed securities by the Feds will be released in the afternoon. As of last Thursday, the Feds have purchased over $925 billion in mortgage backed securities this year. The Feds plan on purchasing up to $1.25 trillion in mortgage backed securities through March 31st.

The minutes of the last Federal Open Market Committee (FOMC) meeting were released yesterday afternoon. Most of the Fed members feel that the recession is over and the economy is beginning to grow, but the weak labor market and modest economic growth expectations are still a threat to a full economic recovery.

There are a number of quarterly earnings reports scheduled for release this week that could affect the stock markets. If the earnings reports are good or better than expected, then you can expect traders to sell bonds and mortgage backed securities and move those funds into stocks. If, on the other hands, earnings reports are worse than expected, then you can expect traders to sell stocks and move those funds into bonds as a safe-haven.

What's Happening With Mortgage Interest Rates Today:

Moderate to high volatility. Overall, expect the mortgage market to be heavily influenced mostly by the stock markets today. Expect mortgage interest rates to rise following higher than better-than-expected readings in the Consumer Price Index.

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
  • Lock 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 today's mortgage interest rates for your situation in Chelsea, MA.

Posted by

 

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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