The Mortgage Interest Rate Lock Advisory for Brewster MA for October 1, 2009

The Mortgage Interest Rate Lock Advisory for Brewster MA for October 1, 2009

Here are some of the events affecting mortgage interest rates today in Brewster, Massachusetts.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened up 3/32 at 101.34.

The price of the FNMA 30-Year 4.5% MBS coupon closed down 3/32 yesterday at 101.25 (as shown by the white line). MBS is currently trading up 12/32 at 101.61 (as shown by the blue line). Remember, on mortgage backed securities (MBSs), as the price goes up, the yield comes down - and mortgage interest rates come down with it. I expect that mortgage interest rates will be 0.125% - 0.25% better in price this morning as compared to yesterday.

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

• Personal Income and Outlays for August - There was a 0.2% rise in personal income in August, up from 0.0% the previous month. Consumer spending is up 1.3% - mostly due to auto sales. There was a 0.2% increase in spending the previous month. Consumer spending makes up two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. Normally, if we see a larger than expected increase in income, it could raise concerns about inflation and make long-term securities such as mortgage backed securities less attractive to investors. However, this report appears to have had no impact on mortgage interest rates this morning.
  
  
• The Institute for Supply Management (ISM) Index for September - this index provides us with an indication of manufacturer sentiment. The reading for September fell back to 52.6, a decrease from last month's reading of 52.9. Analysts were expecting a reading of 53. A reading above 50.0 means that more than 50% of the executives surveyed felt business has improved. This is good news for the mortgage market because it indicates the manufacturing sector is weaker than expected.
  
  
• Jobless Claims - there were 551,000 new claims for unemployment last week, up from the 530,000 new claims filed the previous week. There were 530,000 new claims filed the previous week. However, the 4 week average stands at 548,000, down 25,000 from a month ago, and is at the lowest level of the year. In addition, continuing claims for unemployment fell 123,000 to 6.09 million. With the continuing high rate of people unemployed, the threat of wage based inflation remains subdued. Employers do not have to pay higher wages to attract new employees during high unemployment times as people will be happy just to have a job. This data is usually not considered to be very important to the mortgage market.
  
  
• Fed's MBS Purchase Program - The results of this week's purchases of mortgage backed securities by the Feds will be released in the afternoon. As of last Thursday, the Feds have purchased over $885 billion in mortgage backed securities this year. The Feds plan on purchasing up to $1.25 trillion in mortgage backed securities through March 31st.

In other news, Ben Bernanke, Chairman of the Federal Reserve, will testify before the House Committee on Financial Services today on regulatory reform. He is calling for legislation to end the "too big to fail" syndrome for financial institution as well as for improving consumer protection in their financial dealings.

What's Happening With Mortgage Interest Rates Today:

Low to Moderate Volatility. Overall, look for some volatility in the mortgage market today.

My Mortgage Interest Rate Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

• Lock if my closing was taking place within the next 7 days
• Float if my closing was taking place between 8 and 30 days
• Float if my closing was taking place between 31 and 45 days
• Float if my closing was taking place between 46 and 60 days

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of any or all other borrowers.

For the best mortgage interest rates in Brewster, MA, click here.