Mortgage Rate Forecast for September 8, 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 103.28 this morning - the same as yesterday's close.
- At 9:30 AM, the 4.0% MBS coupon was trading at 103.13 - down 5/32 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 up to 0.125 points worse in price this morning as compared to yesterday afternoon.
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 8-9-2010 to 9-8-2010:
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 $21 billion in 10-Year Notes today. The Notes are used to finance the massive government debt. If there is a strong demand for the Notes, we should see the bond market move higher (resulting in lower mortgage rates) during afternoon trading. However, a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to a broader selling in bonds and mortgage backed securities. The selling of mortgage backed securities could result in higher mortgage rates.
The Beige Book will be released at 2 pm this afternoon. The Beige Book is released two weeks ahead of the Federal Open Market Committee (FOMC) monetary policy meetings, and the Fed relies heavily on this data during their FOMC meetings. Look for a potential market reaction to the release of the Beige Book during afternoon trading hours.
Trend in Mortgage Rates:
The chart below shows the trend in mortgage rates over the past 10 years:
Mortgage Rate Forecast:
Mortgage rates are at their historic lows. They haven't been this low since the early 1950s. These low mortgage rates may be with us for some time - or they may not. 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." Given the most recent economic and job reports, it now appears that mortgage rates are as low as they will ever go.
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!