The Mortgage Interest Rate Lock Advisory for Bedford NH for October 14, 2009

The Mortgage Interest Rate Lock Advisory for Bedford NH for October 14, 2009

Here are some of the events affecting mortgage interest rates today in Bedford, New Hampshire.

What the Mortgage Backed Securities Market is Doing Today:

The price of the FNMA 30-Year 4.5% MBS coupon opened at 101.81 this morning - down 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 100.94 - up 4/32 from its opening. Remember, on mortgage backed securities (MBSs), as the price goes down, the yield goes up - and so do mortgage interest rates. I expect that mortgage interest rates will be 0.25% - 0.50% worse in price again 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:

• Retail Sales Report for September - there was a 1.5% decline in retail sales in September - less than 2.1% decline analysts were expecting. If auto sales are excluded, then there was a 0.5% increase in retail sales - slightly better than the 0.3% increase that was forecasted. There was a 2.7% increase in retail sales in August mostly due to the Cash for Clunkers program. Excluding auto sales, there was a 1.0% increase in sales in August. This data is important to the mortgage backed securities market because it measures consumer spending at retail stores. Because consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be highly important. Stronger than expected readings in retail sales fueled a stock rally this morning and pushed mortgage interest rates higher.

The minutes of the last FOMC Meeting will be released this afternoon. This may be a major mover of the markets - or it could be a non-factor. It will depend on what Federal Reserve governors said at their last meeting. Analysts will be looking for any concerns about inflation as well as any indication of the Fed's next possible move. If there's any indication the Fed governors were concerned about inflation, we may see prices of mortgage backed securities move even lower and mortgage interest rates move even higher this afternoon. However, if they feel that inflation is not a threat at this time and that a rate increase is not likely in the near future, then the mortgage backed securities market and mortgage interest rates should remain calm.

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 to high volatility. Overall, expect the mortgage market to be heavily influenced mostly by the stock markets today. Expect mortgage interest rates to rise following the better-than-expected retail sales report.

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
• Lock 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 Bedford, NH.