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How Rates Move:
Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I'm among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are under pressure today. The MBS market improved by +13 bps yesterday. This was not enough to decrease mortgage rates or fees. The market experienced moderate volatility yesterday.
Today's Rate Forecast: Neutral
Jobs: We will get the May Job Openings and Labor Turnover Survey (JOLTS) at 10 am ET. The consensus estimates call for a move from 7.391M to 7.300M. It was reproted at 7.769M.
Construction: May Construction Spending is expected to improve from -0.4% to -0.2% at 10 am.
Manufacturing: After yesterday's dismal Chicago PMI, how will today's ISM Manufacturing PMI fare? It is expected to remain in contractionary territory with a reading of 48.5. The bond market will really focus on Prices Paid and Employment.
The Fed: We will hear from Fed Chair Powell from Europe this morning.
Today's Potential Rate Volatility: Neutral
This morning markets are under some pressure. Volatility has started at moderate levels.
Bottom Line:
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.
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