The Mortgage Interest Rate Lock Advisory for Weymouth MA for November 5, 2009

The Mortgage Interest Rate Lock Advisory for Weymouth MA for November 5, 2009

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

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 100.88 this morning - up 2/32 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 100.94 - up 2/32 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 about the same in price this morning as compared to yesterday.

Recent Activity in Mortgage Backed Securities:

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:

• 3rd Quarter Productivity Reading - there was a 9.5% increase in productivity in the 3^rd quarter, up from 6.6% increase in the previous quarter, and is much stronger than expected. Analysts expected to see a 6.3% increase. There was a 5.2% decline in labor costs, much more than the 3.9% decline that was expected, and follows a 5.9% decline in the previous quarter. Productivity measures the growth of labor efficiency in producing non-farm goods and services. Unit labor costs reflect the labor costs of producing each unit of output. A larger increase in productivity without an increase in labor costs is considered good news for the mortgage market because higher levels of productivity without an increase in labor costs allows the economy to expand without concerns of inflation. However, this date appears to have had no impact on mortgage interest rates this morning.
  
  
• Jobless Claims - the Labor Dept. reported that 512,000 new claims for unemployment were filed last week, down 18,000 from the previous week, and the lowest since January of this year. Analysts predicted that 523,000 new claims would have been filed.
  
  The four-week average fell by 3,000 to 523,750, and continuing claims fell by 68,000 to 5.886 million. However, continuing claims fell largely due to the expiration of unemployment benefits. With a decreasing trend in the filing of new claims for unemployment, this suggests that the labor market is improving. However, 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 $977 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, the Federal Open Market Committee (FOMC) adjourned yesterday with no change in the short-term interest rate (or federal funds rate). The Fed stated that "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."

The Treasury Dept. announced that $40 billion in 3-Year Notes, $25 billion 10-Year Notes, and $16 billion in 30-Year Bonds will be auctioned next week.

What's Happening With Mortgage Interest Rates Today:

Moderate to High Volatility. Overall, the single most important day this week will be Friday with the release of the Employment Situation Report. Activity in the stock markets will continue to be volatile which in will have an impact on trading of mortgage backed securities. If you have not yet locked in your mortgage interest rate, please proceed with caution and maintain contact with your mortgage professional.

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.

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