Our 5.5 fnma mortgage backed security is under selling pressure again today causing interest rates on mortgages to be higher. Even though the federal reserve cut the fed funds rate yesterday and odds are very good that they will cut again at the upcoming meeting on October 29th, it is having a opposite effect on mortgage rates. Please review yesterday's update as we posted a link to an article you can read on this topic. The big question at this point, is this a temporary move higher before rates start moving down again? All economic reports from around the world, all the speak from the treasury department, the feds all point to rates moving lower but until investors regain their appetite for mortgage backed securities we will have to wait.
In economic news we had the release of jobless claims. Economists where expecting jobless claims to fall from last months reading of 497,000 to 475,000. The actual number came in basically on target at 478,000. The continuing claims though are still at a 5 year high. This shows continued weakness in the labor market which is helping to keep inflation in check which is good for mortgage rates, but as i have been typing this update mbs have fallen to the lows of the day.
Tomorrow bring us the release of trade balance and import numbers. Historically speaking, these reports have a minimal effect on mortgage backed securities. We will let you know the numbers tomorrow. Hopefully, you took our advice yesterday and locked your loan as it could be a while before rates get back to prior days levels.
And as always, stay tuned to our blog and we will post updates as necessary.