Mortgage Rate Forecast for Provincetown MA for March 16, 2010
Here are some of the events affecting mortgage rates today in Provincetown, MA:
What Mortgage Backed Securities Are Doing Today:
- The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.03 this morning - the same as yesterday's close.
- At 9:30 AM, the 4.5% MBS coupon was trading at 100.84 - 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 2-14-2010 to 3-16-2010:
Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage rates. I expect that mortgage rates will be as much as 0.250 points worse in price this morning as compared to yesterday.
- Housing Starts - housing starts was down in February, but better than expected. Housing starts fell 5.9% to an annualized rate of 575,000 units in February after increasing 6.6% in January. This indicates that the decline in new home starts has ended - for now. There's still a glut of new homes for sale. The number of housing permits issued fell 1.6% in January and follows a 4.7% decline in December. However, permits have increased 11.3% from a year ago. Strong seasonal factors and colder weather makes it difficult for housing starts to find any direction during the winter months. Usually, this report has little to no impact on the mortgage market or mortgage rates.
In other news, the Federal Open Market Committee (FOMC) meets today. At 2:15 pm this afternoon, they are expected to issue a statement indicating that the economy continues to improve. They may leave the federal funds rate unchanged at 0 - .25%, but they may raise the discount rate another 0.25%. Traders will be focusing on the post-meeting statement for any signs of inflation as well as the Fed's exit strategy from various stimulus programs. If there's any hint of inflation, we can expect higher mortgage rates this afternoon.
What's Happening With Mortgage Interest Rates Today:
Moderate to High Volatility. Mortgage rates are off their historic lows. However, for the most part, they are holding fairly steady right now. It appears that the overall economy is improving. As such, there's very little potential for lower mortgage rates.
In addition, the Fed is winding down their purchases of mortgage backed securities which is slated to end on March 31st. When that happens, pundits are expecting mortgage rates to get worse by 0.25% - 0.75% in rate. This means that a 30 year fixed rate today of 5.0% with no points could soon be between 5.25% and 6.00%. For a $200,000 mortgage, every 1/4 point increase in rate means an increase of $30 in monthly payment.
If you have not yet locked in your mortgage rate yet, please proceed with caution and maintain contact with your mortgage professional as mortgage rates can change for the worse - often without notice.
If you're happy with the interest rate being offered to you today and if you don't want to risk mortgage rates moving higher, then you should apply and lock in now. It's better to have locked when you should have floated than it is to float when you should have locked.
Get current mortgage rates for Provincetown, MA.