Trend and Forecast in Mortgage Rates on July 20, 2010 - Improving, or...?
Here are some of the events affecting mortgage rates today:
What Mortgage Backed Securities (MBS) Are Doing Today:
- The price of the FNMA 30-Year 4.0% MBS coupon opened at 101.61 this morning - the same as yesterday's close.
- At 9:30 AM, the 4.0% MBS coupon was trading at 101.77 - up 5/32 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 up to 0.125 points better 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 4.0% coupon over the past 30 days from 6-20-2010 to 7-20-2010:
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- Housing Starts - fell 5% in June to an annualized rate of 549,000 units, and is much worse than expected. Housing starts rose 3.9% in April and 5.0% in March, but fell 14.9% in May. Permits for new constructions rose 2.1% in June and follows a 5.9% decline in May and a 10.9% decline in April. Usually, this report has little to no impact on the mortgage market. However, this report led to lower mortgage rates this morning.
Trend in Mortgage Rates:
The chart below shows the trend in mortgage rates over the past 3 years:
Mortgage Rate Lock Advice:
Mortgage rates are at their historic lows - and haven't been this low since the early 1950s. They could possibly go even lower as the global economic crisis continues. However, the stock market is over sold while the bond market is over bought, and rates could begin to head up soon as the markets begin to correct themselves. As such, I would not risk the chance waiting for lower mortgage rates.
If I were financing a home or refinancing a mortgage today, I would:
- Lock if my closing was taking place within 7 days
- Float if my closing was taking place between 8 and 15 days
- Float if my closing was taking place between 16 and 30 days
- Float if my closing was taking place more than 30 days from now
Be sure to check out today's mortgage rates.