Mortgage Rate Forecast for May 18, 2010
Here are some of the events affecting mortgage rates today:
What Mortgage Backed Securities Are Doing Today:
- The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.53 this morning - the same as Yesterday's close.
- At 9:30 AM, the 4.5% MBS coupon was trading at 101.62 - up 3/32 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 4-18-2010 to 5-18-2010:
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- Producer Price Index (PPI) - fell 0.1% in April, and is a reversal from the 0.7% rise in March. This means that prices paid at the producer level fell, and is keeping inflation in check. The decrease in the PPI was attributed mostly to a decrease in food and energy costs. At the core level, the PPI rose 0.2%. The core level excludes the more volatile food and energy prices. Falling prices decreases the fear of inflation and tends to have a positive impact on the mortgage market. While significant, this report had no impact on mortgage rates this morning.
- Housing Starts - was up 5.8% in April to an annualized rate of 672,000 units, better than expected. Housing starts rose 5.0% in March after falling 5.9% in February. This suggests that the overall housing sector is beginning to improve. However, permits for new constructions fell 11.5% in April following a 5.4% increase in March. Usually, this report has little to no impact on the mortgage market or mortgage rates.
In other news, the stock markets in Asia and Europe have ended their sell-offs and are now improving. This signals a growing confidence the $960 billion European bailout package for Greece will work.
Trend in Mortgage Rates:
The chart below shows the trend in mortgage rates over the past year:
Be sure to check out today's mortgage rates.
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