Mortgage Rate Forecast for August 9, 2010 - Improving, or...?

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Mortgage Rate Forecast for August 9, 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 102.78 this morning - the same as Friday's close.

  • At 9:30 AM, the 4.0% MBS coupon was trading at 102.72 - down 2/32 from its opening.

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 about the same in price this morning as compared to Friday.

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 7-10-2010 to 8-9-2010:

The price trend of the FNMA 30-Year 4.0% coupon from 7-10-2010 to 8-9-2010

Economic Reports, News, and Events Affecting Mortgage Rates Today:

  • There are no economic reports scheduled for release today.

In other news, the Treasury Dept will be auctioning $38 billion in 2-Year notes, $37 billion in 5-Year notes, and $29 billion in 7-Year Notes for a total of $78 billion this week. The Notes and Bonds are used to finance the massive government debt. The results of these auctions could affect mortgage rates next week.

Trend in Mortgage Rates:

The chart below shows the trend in mortgage rates over the past 3 years:

The 3 year trend in mortgage rates from August 2007 to August 2010

Mortgage Rate Forecast:

Mortgage rates are at their historic lows. They haven't been this low since the early 1950s - and continue to go lower as the economic recovery slows. These low mortgage rates may be with us for some time. Usually, mortgage rates go up during the summer months during the peak home buying season, then go down as the fall and winter seasons approach. But these are not "normal times." It's possible that mortgage rates will continue to slowly fall. However, they could turn at any time - and will if future economic news shows that we're finally coming out of the recession.

If you're thinking about refinancing your mortgage and if these low mortgage rates make sense to you, then take advantage of them while you can. If you're happy with the mortgage 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.

Are you in need of a mortgage to purchase a home? Or want to refinance an existing mortgage into a lower permanent fixed rate? Or want to take cash out of the equity of your home? Or consolidate debt and reduce the monthly bills? Then be sure to request a mortgage rate quote today!

 

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East Bridgewater, MA 02333
Phone: (508) 443-1332

Lew Corcoran, ASP®, IAHSP, IAHSP-CB
Accredited Home Staging Professional
Professional Real Estate Photographer

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