Market Insight, Mortgage, Mortgage News, Mortgage Rates

Fannie Mae Mortgage Bonds 48 Hour Reversal of Fortune

August 5, 2011 by · Leave a Comment 

It seems as if it were just yesterday that everyone in the financial sector was astounished how low the yield for the Fannie Mae 30 year fixed mortgage bonds had been pushed. Wait a second…it was yesterday.

Fast forward to the closing bell today and it was a complete reversal of fortune for Fannie Mae mortgage bonds. Take a look at the chart below and observe the performance from yesterday through today.

Mortgage Bonds Reversal of Fortune by James Barath

It should be noted that when the price increases on the Fannie Mae mortgage bond, it actually has an inverse relationship with mortgage rates. Coincidentally, mortgage rates on 30 year fixed rate home loans would go down. The opposite holds true as well. When Fannie Mae mortgage bonds decrease in price, 30 year fixed mortgage rates increase.

As you can see in the chart from the past 48 hours, Fannie Mae mortgage bonds are actually worse than where they opened Thursday morning. Although this occurs often in today’s volatile bond market, it is the extreme range in price movement that was all the buzz.

Rarely do you see Fannie Mae mortgage bonds increase and/or decrease more than 50 bps a day. In this case, they changed near 100 bps both days. What does all this mean to you as a home buyer or someone who was interested in refinancing their home?

Mortgage rates literally decreased by more than 0.250% – 0.375% on Thursday to only increase 0.375% – 0.500% today. If you’re uncertain as to which way mortgage rates are trending, we don’t blame you. The quickest and easiest way to monitor the daily rate trend is to keep an eye on the rate meter to the right.

Don’t have the time or the patience to keep close tabs on how Fannie Mae mortgage bonds and mortgage rates are trending? Call or text me at 512-522-7284 to get your personalized rate monitor service.

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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