Interest Rates, Loan Information

Fed Meeting and Interest Rates

Mortgage Backed Security prices are down -1/32 (FNMA 30-yr 4.5 at 100.26), above 9:45 et pricing of -5/32. There was little interest rate reaction to the Federal Reserve announcement. October In Supply Management Services came in a little lower than expected. The Treasury will auction a record $81 billion in 3-yr, 10-yr, and 30-yr Treasuries next week. The Dow is up 30 points today. Tomorrow, Productivity and Jobless Claims will be released at 8:30 et. As expected, the Federal Reserve (Fed) made no change in the fed funds rate. The statement kept the same language indicating that the Fed will hold rates at extremely low levels for an “extended period.” The Fed reported that economic activity has “continued to pick up” and that the housing market has improved. According to the Fed, inflation is likely to remain low due to unused capacity in the economy. Overall, there were no major surprises in the statement, and the Fed provided no firm guidance on the timing of future rate hikes.

MBS prices are down -5/32 (FNMA 30-yr 4.5 at 100.22), which is about 10/32 lower than yesterday at this time. Unfavorable repricing took place yesterday. The 30-yr fixed FNMA required net yield (60 day) is now at 4.82%, from 4.77% yesterday.
 
It will be a big day with the statement from the Fed meeting coming out this afternoon. The Dow is up 50 points. ISM Services will be released at 10:00 et. The Treasury will announce the size of upcoming auctions at 11:00 et. The Fed announcement will be released around 2:15 et. No change in rates is expected, but the statement may contain some indication about when the Fed will tighten monetary policy.

The Mortgage Bankers Association weekly purchase activity index fell by 2%, while the refinancing activity index increased by 15%. Average reported rates for the prior week fell to 4.97% from 5.04% for 30-yr fixed mortgages