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:
Mortgage rates are moving slightly lower today. The MBS market worsened by -2 bps yesterday. This was not enough to increase mortgage rates or fees. The market experienced high volatility yesterday.
Today's Rate Forecast:
Manufacturing: February headline Durable Goods Orders were weaker than expected, down -1.0% vs. est. of +0.6%. Ex Transportation, it was flat at 0.0% vs. est. of 0.2% and Non Defense Capital Goods Ex Aircraft was up 0.2% vs. est. of 0.0%. The S&P Markit Flash PMIs for March had a preliminary reading of 49.3 vs. 47.0 for manufacturing and 53.8 vs. 50.5 for services.
Today's Potential Rate Volatility:
This morning markets are moving very chaotically. Volatility has started extremely high as the markets digest news out of Europe.
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.