Rate Update November 2, 2009
We took a floating position into Friday and the move paid off as rates improved. 30 year fixed mortgage rates have now remained within a tight range between 4.875%-5.125% since late August as this chart demonstrates. Low volatility ultimately helps mortgage rates because lenders build in smaller premiums into their rates to account for acute swings in interest rates. This is pattern is not likely to hold in the long-term.
Mortgage-backed bonds (MBSs) have come under modest selling pressure (which threatens to push rates higher) this morning in response to better than expected economic data. This morning we saw reports which showed better than expected manufacturing activity (both domestically and in China), construction spending, and existing home sales. Good news for the economy is typically bad news for mortgage rates.
Looking ahead this week we have another busy schedule to manage. The Fed will hold their regularly scheduled two day meeting which concludes Wednesday. At the conclusion of their meeting we’ll get their monetary policy statement which we’ll take a closer look at tomorrow. On Thursday the US Treasury will announce future auction supply and on Friday we get the October employment report.
Current outlook: locking
Posted: November 2nd, 2009 under Rate Update.
Tags: 2009 mortgage rates, nov 2 2009 MBS outlook, nov 2 2009 mortgage rate outlook, nov 2 2009 what should I do about mortgage rates?, nov. 2, november 2 2009 direction of mortgage rates