The Mortgage Interest Rate Lock Advisory for Plymouth MA for January 28, 2010
Here are some of the events affecting mortgage interest rates today in Plymouth, MA.
What Mortgage Backed Securities Are Doing Today:
- The price of the FNMA 30-Year 4.5% MBS coupon opened at 100.75 this morning - the same as yesterday's close.
- The 4.5% MBS coupon is currently trading at 100.69 - down 2/32 from its opening.
Price Trend in Mortgage Backed Securities:
The chart below shows the price trend of the FNMA 30-Year 4.5% coupon over the past 30 days from 12-28-2009 to 1-27-2010:
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 0.125% - 0.375% worse in price this morning as compared to yesterday.
Economic Reports, News, and Events Affecting Mortgage Interest Rates Today:
- Durable Goods Orders Report for December - there was a 0.3% increase in new durable goods orders in December, much less than the 1.6% increase that was expected. This follows a 0.2% increase in November. This report shows that the manufacturing sector is gaining some momentum, albeit slowly. This report provides us with an important measurement of manufacturing sector strength by tracking orders for big-ticket items or products that are expected to last at least three years. This report had no impact on mortgage interest rates this morning.
- Jobless Claims - 470,000 new claims for unemployment were filed last week, 30,000 more than expected, but 12,000 less than the previous week. Analysts predicted there would be 440,000 new claims. However, the four-week average fell 9,000 to 440,750. While the four-week average has increased by 9,500 to 456,250, continuing claims fell by fell 57,000 to 4.602 million. However, many people have reached the expiration of their jobless benefits. This also suggests that the labor market is no longer improving. While significant, this data is usually not considered to be very important to the mortgage market.
In other news, the Treasury Dept. will auction $32 billion 7-Year Notes today. Yesterday's auction of the 5-Year Note was met with lackluster demand. That could lead to an even weaker demand for today's auction for the 7-Year Note, and lead to higher mortgage interest rates this afternoon.
The Federal Open Market Committee (FOMC) concluded its meeting yesterday with no change in the key short-term interest rates. The afternoon report indicated that the economy is recovering and gaining strength. This led to more concerns about inflation and drove mortgage interest higher yesterday afternoon.
Both the results of the 5-Year Note auction and the FOMC statement can cause volatility in the bond and mortgage market this afternoon.
What's Happening With Mortgage Interest Rates Today:
Moderate to High Volatility. Mortgage interest rates are still at historic lows. There's not much potential for MBS prices to tick higher (lower mortgage rates) as the Fed begins winding down their stimulus programs soon as it appears the overall economy is improving. There's also the fear of inflation.
If you're happy with the rate being offered to you and don't want to risk mortgage interest rates moving higher, you should apply and lock in today. It's better to have locked when you should have floated than it is to float when you should have locked.
Mortgage interest rates are currently getting worse. If you have not yet locked in your mortgage interest rate yet, please proceed with caution and maintain contact with your mortgage professional as mortgage interest rates can continue to change for the worse.
Get current mortgage interest rates for your situation in Plymouth, MA.
