Mortgage Rate Forecast for September 16, 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 102.41 this morning - the same as yesterday's close.
- At 9:30 AM, the 4.0% MBS coupon was trading at 102.44 - up 1/32 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 the same 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 8-17-2010 to 9-16-2010:
Economic Reports, News, and Events Affecting Mortgage Rates Today:
- Jobless Claims - 450,000 new claims for unemployment were filed last week, not nearly as bad as expected, and 3,000 less than the upwardly revised 453,000 claims filed the previous week. The four-week average for unemployment fell by 13,500 to 464,750 while continuing claims for the week of September 4 fell by 84,000 to 4.485 million. This report shows that the job market is again improving, but only slightly, and is raising expectations for more people going back to work. This report had no impact on the mortgage market or mortgage rates this morning.
- Producer Price Index (PPI) - rose 0.4% in August, and follows a 0.2% rise in July. The increase in the PPI was attributed mostly to higher energy prices. Food prices fell 0.3% after rising 0.7% the month before. At the core level, the PPI rose 0.1% as expected. The core level excludes the more volatile food and energy prices. Rising prices increases the fear of inflation and tends to have a negative impact on the mortgage market. As the likelihood of any increase in inflation is non-existent, this report had no impact on the mortgage market or mortgage rates this morning.
Trend in Mortgage Rates:
The chart below shows the trend in mortgage rates over the past 15 years:
Mortgage Rate Forecast:
Mortgage rates are coming off their historic lows as the overall economic outlook is beginning to improve. 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!
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