Mortgage Rate Forecast for September 23, 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 102.91 this morning - the same as yesterday's close.
- At 9:30 AM, the 4.0% MBS coupon was trading at 103.06 - 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 about 0.125 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 8-24-2010 to 9-23-2010:
Economic Reports, News, and Events Affecting Mortgage Rates Today:
- Jobless Claims - 465,000 new claims for unemployment were filed last week, worse than expected, and is 12,000 less than the upwardly revised 453,000 claims filed the previous week. The four-week average for unemployment fell by 1,500 to 463,250 while continuing claims for the week of September 4 fell by 48,000. 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 a positive impact on the mortgage market this morning and led to lower pricing for mortgage rates.
- Existing Home Sales Report - released by the National Association of Realtors (NAR), this report provides us with a measurement of housing sector strength and mortgage credit demand. Existing home sales rose 7.6% in August to an annualized rate of 4.13 million homes - better than expected - and is at the second lowest level since 1997. Year-over-year, existing home sales is down 19.0%.
The inventory of unsold homes stands at 3.98 million - an 11.6 month supply. This means it's still a buyer's market. The median sales price of homes fell 1.9% to $178,600. The median sales price is where half of the home prices are above this amount and the half below it. This report had a negative impact on the mortgage market this morning and led to higher pricing for mortgage rates.
- Leading Economic Indicators (LEI) - rose 0.3% in August as expected. This follows a 0.1% increase in July and a 0.3% decline in June. This Conference Board report attempts to predict economic activity over the next three to six months. This report indicates that the overall economy is no longer in a recession, and now beginning to grow albeit slowly. 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 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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