Mortgage rates in Massachusetts remianed quite steady to start the week, despite a recent rally in the equities market. The Obama Administration recently released their 2011 Budget/Forecast, providing analyst with a plethora of data to scrutinize. What does this mean for mortgage rates? Well, the budget calls for $1.6 trillion in deficit spending next year, thus placing a strain on Treasury auctions needed to eventually pay-off the debt, thus placing a burden on the yields (%) for mortgage backed securities. Should yields on mortgage backed securities (MBS) rise, a rise on interest rates will surely follow to offset the MBS yield pay-outs to investors. Furthermore, should the Federal Reserve continue its' plan to cease purchasing mortgage backed securities at the end of March 2010, mortgage rates will most certainly rise from the historic levels we've been celebrating for the past 12 months. This is one major reason HomeQuest Mortgage professionals are urging consumers to act now and avoid missing the opportunities in today's marketplace.
The Pending Home Sales report will hit the news wires today to provide us with some insight to the recent trends in the housing market. The National Association of Realtors releases the report, which shows the monthly change in the amount of existing homes (excluding new construction) in which a purchase & sale contract has been signed, however pending a closing date. Pending Home Sales is a leading indicator of the housing activity and economic momentum, as it provides supplemental evidence of consumer confidence. In addition, home purchases stimulate the economy in other retail merchandising, as there are many other housing fixtures needed to complete the furnishing of the home. The data in this report has a two month lag time, so today's data is for the prior month of December 09.