The Mortgage Interest Rate Lock Advisory for Truro MA for December 3, 2009

The Mortgage Interest Rate Lock Advisory for Truro MA for December 3, 2009

Here are some of the events affecting mortgage interest rates today in Truro, MA.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.0% MBS coupon opened at 99.25 this morning - down 11/32 from yesterday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.0% coupon:

The FNMA 30-Year 4.0% MBS coupon is currently trading at 99.31 - up 2/32 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 0.125% - 0.375% worse in price this morning as compared to yesterday.

Recent Activity in Mortgage Backed Securities:

The chart below shows the price trend of the FNMA 30-Year 4.0% coupon over the past 30 days:

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

• Revised 3rd Quarter Productivity Report - nonfarm productivity rose at an annualized rate of 8.1% last month, less than the 9.5% rate the previous month. Unit labor costs fell 2.1%, much less than the 4.2% decline that was expected. Lower levels of productivity with increases in labor costs are thought to create inflationary pressures on the economy. That led to an increase in mortgage interest rates this morning.
  
  
• Jobless Claims -457,000 new claims for unemployment were filed last week, much less than expected. It's the 5th straight week of declines, and is the lowest number of weekly claims filed since September 2008. Analysts forecasted that 485,000 new claims for unemployment would have been filed last week. The four-week week average fell to 481,250 while continuing claims rose slightly to 5.465 million. With a decreasing trend in the filing of new claims for unemployment, this suggests that the labor market is improving. 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 $1.038 trillion in mortgage backed securities this year. The Feds plan on purchasing up to $1.25 trillion in mortgage backed securities through March 31st.

In other news, Ben Bernanke is scheduled to appear before the Senate Banking Committee today as he seeks confirmation to continue in a 2nd term as Chairman of the Federal Reserve.

What's Happening With Mortgage Interest Rates Today:

Moderate to High Volatility. Overall, we have seen sizable movement in mortgage interest rates this week. While it's been a fairly active week for the mortgage market and mortgage interest rates, the most important day of the week will be Friday with the release of the Employment Situation Report. This report will probably be the key to rates moving lower or higher for the week. If it reveals stronger than expected results, we may see mortgage interest rates spike higher - possibly erasing any gains from the week.

There's not much room for MBS prices to move higher or for mortgage interest rates to move lower at the moment. While rising, mortgage interest rates are still at historic lows. If you're happy with the rate being offered to you and don't want to risk mortgage interest rates moving higher, you should apply and lock in today. While there's still some room for MBS prices to tick higher, it's better to have locked when you should have floated than it is to float when you should have locked.

If you have not yet locked in your mortgage interest rate, please proceed with caution and maintain contact with your mortgage professional. Also, give very serious consideration to applying now and locking in before mortgage interest rates get worse.

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 Truro, MA.