The Mortgage Interest Rate Lock Advisory for Truro MA for February 18, 2010
Here are some of the events affecting mortgage rates today in Truro, MA.
What Mortgage Backed Securities Are Doing Today:
- The price of the FNMA 30-Year 4.5% MBS coupon opened at 100.69 this morning - the same as yesterday's close.
- At 9:30, the 4.5% MBS coupon was trading at 100.72 - up 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 1-19-2010 to 2-18-2010:
Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and so do mortgage rates. I expect that mortgage rates will be the same in price this morning as compared to yesterday.
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- Jobless Claims - 473,000 new claims for unemployment were filed last week, 33,000 more than expected, and 33,000 more than the previous week. Analysts predicted there would be 440,000 new claims. However, the four-week average fell by 1,500 to 467,500, and is in line with the readings of the past two months. There was no change in continuing claims for unemployment as it remains at 4.563 million. This suggests that the labor market is no longer improving. This data is usually not considered to be very important to the mortgage market; however, the increase in unemployment helped kept mortgage rates from getting worse this morning.
- Producer Price Index (PPI) - jumped 1.4% January, more than the 0.8% increase that was expected, and much more than the 0.2% increase in December. This means that prices paid at the producer level rose more than thought. At the core level, the PPI was up 0.3% after being flat in December. The core level excludes the more volatile food and energy prices. Rising prices indicate inflation and tends to have a negative impact on the mortgage market which in turn leads to higher mortgage rates. While significant, this report had no impact on mortgage rates this morning because of the higher unemployment numbers.
- Leading Economic Indicators (LEI) - rose only 0.3% in January, less than the 0.5% rise that was expected, and is less than the 1.1% increase in December. This indicated that that economic activity may rise in the near future, but not as much as previously thought. The smaller than expected rise is good news for the bond and mortgage markets, but had no effect on mortgage rates this morning.
In other news, the minutes of the January Federal Open Market Committee (FOMC) meeting were released yesterday. The Fed is currently unwinding its stimulus program in mortgage backed securities (set to expire March 31st), and plans to divest itself of all the non-treasury assets it holds. The Fed is expected to begin increasing the discount rate soon. The discount rate is the overnight rate banks pay for borrowing from the Federal Reserve.
The Treasury Dept will announce later this morning Treasury announces the terms of the Notes and Bond auctions scheduled for next week. The Notes and Bonds are used to finance the massive government debt, and could result in upward revisions to mortgage rates next week.
What's Happening With Mortgage Interest Rates Today:
Moderate to High Volatility. Mortgage 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 rates.
Mortgage rates were worse yesterday, but may improve slightly today. 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.
If you're happy with the rate being offered to you and if you don't want to risk mortgage 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.
Get today's mortgage rates for your situation in Truro, MA.