The Mortgage Interest Rate Lock Advisory for Westborough MA for October 20, 2009

The Mortgage Interest Rate Lock Advisory for Westborough MA for October 20, 2009

Here are some of the events affecting mortgage interest rates today in Westborough, MA.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.05 this morning - up 9/32 from yesterday's close.

The chart below shows today's price trend of the FNMA 30-Year 4.5% coupon:

The FNMA 30-Year 4.5% MBS coupon is currently trading at 100.97 - up 6/32 from its opening. 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% - 0.375% better in price this morning as compared to yesterday.

The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days:

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

• Housing Starts for September - there were 590,000 new housing starts last month, less than the 615,000 that was forecasted, and is down from 598,000 starts the previous month. While this report provides us with an indication of housing sector strength and mortgage credit demand, it's but usually is not a mover of mortgage interest rates.
  
  
• Producer Price Index (PPI) for September - there was a 0.6% decline in the overall PPI index and a 0.1% decline in the core index, and is worse than expected. Analysts were expecting to see a 0.3% decline in the overall index and a 0.1% rise in the core data reading. The PPI is a measure of the average price of a fixed basket of capital and goods received by producers. This index measures the inflationary pressures at the producer level of the economy. The core data is the more important of the two because it excludes more volatile food and energy prices. Weaker than expected readings in the core data led to a drop in mortgage interest rates this morning.

There are a number of quarterly earnings reports scheduled for release this week that could affect the stock markets. If the earnings reports are good or better than expected, then you can expect traders to sell bonds and mortgage backed securities and move those funds into stocks. If, on the other hands, earnings reports are worse than expected, then you can expect traders to sell stocks and move those funds into bonds as a safe-haven.

What's Happening With Mortgage Interest Rates Today:

Moderate volatility. Overall, expect the mortgage market to be heavily influenced mostly by the stock markets 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
• Floata 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.

Get today's mortgage interest rates for your situation in Westborough, MA.