The Mortgage Interest Rate Lock Advisory for Brewster MA for February 11, 2010
Here are some of the events affecting mortgage interest rates today in Brewster, MA.
What Mortgage Backed Securities Are Doing Today:
- The price of the FNMA 30-Year 4.5% MBS coupon opened at 100.62 this morning - the same as yesterday's close.
- At 9:30, the 4.5% MBS coupon was trading at 100.52 - down 2/32 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 1-12-2010 to 2-11-2010:
Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage interest rates. 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.
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- Jobless Claims - 440,000 new claims for unemployment were filed last week, 27,000 less than expected, and 40,000 less than the previous week. Analysts predicted there would be 467,000 new claims. The Labor Dept attributed the decline to the end of a backlog that was inflating the numbers (huh?). However, the four-week average fell 9,000 to 440,750. The four-week average has fallen for the first time in a month by 1,000 to 468,500. Continued claims also fell by 79,000 to 4.538 million - the lowest since January 3, 2009. This suggests that the labor market is no longer getting worse. While this data is usually not considered to be very important to the mortgage market and had no effect on mortgage interest rates this morning.
In other news, Freddie Mac announced yesterday that they will purchase virtually all of the delinquent mortgages that are 120 or more days past due. This amounts to about $71 billion. The news caused a dramatic increase in mortgage interest rates yesterday.
The Treasure Dept will be auctioning 30-Year Bonds today and will post results at 1:00 PM ET. The Notes and Bonds are used to finance the massive government debt. If there is a strong demand for the Notes, we should see the bond market move higher during afternoon trading. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling of bonds could result in upward revisions to mortgage interest rates.
What's Happening With Mortgage Interest Rates Today:
Moderate to High Volatility. Mortgage interest rates are still at historic lows. However, because it appears that the overall economy is improving, and because the Fed continues to auction Treasury Notes to pay for the massive government debt, there's the fear of inflation. In addition, the Fed is winding down their purchases of mortgage backed securities which is slated to end on March 31st. As such, there's not much potential for lower mortgage interest rates.
If you're happy with the rate being offered to you and if you don't want to risk mortgage interest rates moving higher, then 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 improving slightly. If you have not yet locked in your mortgage interest rate yet, please proceed with caution and maintain contact with your mortgage professional and rates can change for the worse - often without notice.
Get current mortgage interest rates for your situation in Brewster, MA.