Mortgage Rate Forecast for September 17, 2010 - Improving, or...?

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Mortgage Rate Forecast for September 17, 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 102.56 this morning - up 8/32 from yesterday's close.

  • At 9:30 AM, the 4.0% MBS coupon was trading at 102.53 - down 1/32 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 up to 0.250 points better 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 8-18-2010 to 9-17-2010:

The price trend of the FNMA 30-Year 4.0% coupon from 8-18-2010 to 9-17-2010

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

Consumer Price Index (CPI) - as expected, the overall price index rose 0.3% in August - mostly because of rising energy costs. The core data, which excludes the more volatile food and energy prices, remained flat. This is one of the most important monthly reports that we see as it measures inflationary pressures at the consumer level of the economy. Year-over-year, inflation remains low at 1.2%. This report had no impact on the mortgage market or mortgage rates this morning.

University of Michigan's Index of Consumer Sentiment - came in with a reading this morning of 66.6, worse than expected, and down significantly from April's and May's readings. Despite improving economic reports, consumer confidence on the future outlook is waning. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates. This report indicates that consumers are less likely to make many purchases. The consumer sentiment report did not have an 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 20 years:

The 20 year trend in mortgage rates from September 1990 to September 2010

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!


Posted by


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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Comments (2)

Ruth Vogt
Fairway Independent Mortgage, LLS. Equal Housing Opportunity. Regulated by the Division of Real Estate. - Colorado Springs, CO
719-592-0855 Apply 24/7

You know the law of gravity is "what goes up must come down". So the law of interest rates has to be "what goes down must go up".....

Sep 18, 2010 08:57 AM
Lew Corcoran, ASP®
Scena Home Staging & Decora Photography - East Bridgewater, MA
Home Stager & Real Estate Photographer

Unfortuantely, you can't keep mortgage rates down forever.

Sep 20, 2010 03:19 AM