The Mortgage Interest Rate Lock Advisory for Wareham MA for January 29, 2010
Here are some of the events affecting mortgage interest rates today in Wareham, MA.
What Mortgage Backed Securities Are Doing Today:
- The price of the FNMA 30-Year 4.5% MBS coupon opened at 100.81 this morning - the same as yesterday's close.
- The 4.5% MBS coupon is currently trading at 100.62 - down 6/32 from its opening.
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 12-29-2009 to 1-28-2010:
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% - 0.25% worse in price this morning as compared to late yesterday afternoon.
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- Advance Reading of the 4th Quarter GDP - showed that the economy expanded at a 5.7% annualized rate, mostly due to a declining contraction in business inventories. This is the highest rate of expansion since the third quarter of 2003. The expansion is also much more than the 4.5% annualized rate analysts expected, and more than the 2.2% annualized rate at the end of the 3rd quarter of 2009. This data usually does not have an impact on the mortgage market. However, this report led to higher mortgage interest rates this morning.
- The 4th Quarter Employment Cost Index (ECI) - is up 0.5% for the 4th quarter of 2009, slightly better than the 0.4% increase that was expected. The ECI measures the costs of employee wages and benefits, this providing us with an indication of the threat of wage inflation. Current forecasts are showing an increase of 0.4%. Because of the GDP report, the ECI report had little impact on the mortgage market this morning.
- University of Michigan's Index of Consumer Sentiment - a reading this morning of 74.4 indicates that consumer sentiment continues to improve. The reading was better than expected, and is better than the 72.8 reading the previous month. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates. While encouraging, this report usually has little to no impact on the mortgage market this morning.
In other news, Ben Bernanke, Chairman of the Federal Reserve, was confirmed by the Senate yesterday for a second four-year term.
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.
Mortgage interest rates are currently trending higher. If you have not yet locked in your mortgage interest rate yet, please proceed with caution and maintain contact with your mortgage professional as mortgage interest rates can continue to change for the worse.
Get current mortgage interest rates for your situation in Wareham, MA.