Mortgage Rate Forecast for Massachusetts for April 30, 2010
Here are some of the events affecting mortgage rates today in Massachusetts:
What Mortgage Backed Securities Are Doing Today:
- The price of the FNMA 30-Year 4.5% MBS coupon opened at 100.56 this morning - same as yesterday's close.
- At 9:30 AM, the 4.5% MBS coupon was trading at 100.62 - up 2/32 from its opening.
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 about the same 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 3-31-2010 to 4-30-2010:
Economic Reports, News, and Events Affecting Mortgage Interest Rates in Massachusetts Today:
- Advance Reading of the 1st Quarter Gross Domestic Product (GDP)- showed that the economy slowed to an annualized growth rate of 3.2%. This follows an annualized growth rate of 5.6% in the last quarter of 2009. The increase is mainly from consumer consumption (which grew at an annualized rate of 3.6%) and business investment (equipment purchases). Unless it varies widely from forecasts, this data usually does not have much of an impact on the mortgage market or mortgage interest rates.
- Employment Cost Index (ECI) - is up 0.6% for the 1st quarter of 2010, slightly more 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. Wages & salaries rose 0.4%, down slightly from the last quarter of 2009. The year-over-year rate for wages & salaries remains unchanged at up 1.5%.
The costs of benefits increased 1.1% in the first quarter of this year - more than double the 0.5% increase in the 4th quarter of 2009. Year-over-year, the costs of benefits rose 2.2%, the highest rate since the second quarter of 2007, and much more than the 1.5% year-over-year increase in the 4th quarter of 2009.
The ECI report usually does not have much of an impact on the mortgage market or mortgage interest rates.
- The Revised University of Michigan Index of Consumer Sentiment - came in at 72.2, better than the 71.5 reading analysts were expecting, but lower than the 73.6 reading the previous month. An increase in consumer confidence indicates that consumers may be more apt to make large purchases in the near future. However, consumer sentiment report usually does not have much of an impact on the mortgage market or mortgage interest rates.
What's Happening With Mortgage Interest Rates in Massachusetts Today:
Moderate to High Volatility. Mortgage rates are off their historic lows, and while they rose significantly a couple of weeks ago, they have since come back down a bit. But this may be temporary.
The overall economy is improving without any increase in jobs. The Fed has also ended their purchases of mortgage backed securities. In addition, the federal deficit continues to grow while demand for US debt is waning. We're also entering the prime home selling and buying season. Historically, mortgage rates rise and fall with the thermometer. Usually from this time of the year and into the summer months, as the weather warms, mortgage rates rise.
As such, there's little or no potential for lower mortgage rates anytime soon. 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.
If I were applying for a mortgage today, I would lock in my rate. However, if I were to continue floating my rate, I would proceed with caution and maintain contact with my mortgage professional. I would be ready to lock in at a moment's notice as mortgage rates can change for the worse.
Be sure to check out today's Massachusetts mortgage rates.