The Mortgage Interest Rate Lock Advisory for Barnstable MA for January 12, 2010
Here are some of the events affecting mortgage interest rates today in Barnstable, MA.
What Mortgage Backed Securities Are Doing Today:
- The price of the FNMA 30-Year 4.5% MBS coupon opened at 99.97 this morning - down 5/32 yesterday's close.
- The 4.5% MBS coupon is currently trading at 100.41 - up 14/32 from its opening.
Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and mortgage interest rates come down with it. I expect that mortgage interest rates will be 0.125% - 0.375% 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 12-12-2009 to 1-11-2010:
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today
- International Trade Report - the trade deficit for November came in at -$36.4 billion, more than the expected -$34.5 billion deficit. The international trade deficit increased in November due to higher petroleum and non-petroleum imports. While the trade deficit is more than expected, the report had no impact on the mortgage market this morning.
In other news, the Fed Reserve will be auctioning $40 billion in 3-Year Notes today. If the auction is met with weak demand, it could lead to higher mortgage interest rates this afternoon.
China is ordering its banks to set aside a larger proportion of deposits as reserves to curb the rapid economic growth, inflation, and avoid asset bubbles. That has spurred demand for US debt on the premise that slowing growth in China will lessen fears of inflation fears and reduce demand for equities.
The Treasury Dept expects to lose $120 billion on the Troubled Asset Relief Program (TARP) to banks. As a result, President Obama is proposing that banks and financial institutions that participated in the TARP program to fund up to $120 billion through banking fees to repay the TARP losses. According to a White House official, the details of the program will be contained in the fiscal 2011 budget that Obama will submit to Congress next month.
What's Happening With Mortgage Interest Rates Today:
Moderate to High Volatility. Mortgage interest rates are still at historic lows. There's not much potential for MBS prices to tick higher (lower mortgage rates) as the Fed begins winding down their stimulus programs soon as it appears the overall economy is improving. There's also the fear of inflation.
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. 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 yet, please proceed with caution and maintain contact with your mortgage professional.
Get current mortgage interest rates for your situation in Barnstable, MA.
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