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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 moving sideways today. The MBS market improved by +5 bps yesterday. This was not enough to decrease mortgage rates or fees. The market experienced moderate volatility yesterday.
Today's Rate Forecast: Neutral
The Fed: Fed Governor Waller once again stumped for a 25BPS rate cute at the July FOMC meeting citing a labor market that is "on the edge" as well as at least one more cut by the end of the year to bring the FOMC policy closer to neutral.
Consumer Sentiment: We will get the Preliminary July UofM Consumer Sentiment Index at 10 am ET. It is expected to move up a tick from 60.7 to 61.4 which is a very low level. However, the survey "soft" data has not been lining up with the "hard" data. For example, Consumer Sentiment survey data has been low but Retail Sales were high. It was reported at 61.8.
Today's Potential Rate Volatility: Neutral
This morning markets are mostly moving sideways with a very small level of support. Volatility has started at moderate to low 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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