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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
Sigma Research said
that said rates are trending better this morning, but the slight gains
are slipping. Last week the MBS market
improved
by +51 bps.
This may've been enough to affect rates or fees. The market
was extremely volatile last week.
Today's Rate Forecast:
Neutral
According to Sigma Research
Greece said "NO!" Greek pride trumped the financial crisis spreading in Greece, its banks about to run out of money. The Greek financial minister resigned. ECB now on the clock about providing more money. Germany still holding a hard line. Meetings in France getting underway. Next payment deadline; July 20th Greece is due to pay €3.5 billion ($3.9 billion) to the European Central Bank. The ECB is now keeping Greek banks dangling: alive, but unable to get their hands on additional emergency funds beyond the €89 billion they have already taken. If Greece misses the July 20 payment, the ECB is widely expected to cut them off entirely. More meetings ahead, the can is still being kicked. Greek banks have enough cash to continue doling out money to depositors through Monday. By Tuesday, they may not have any left. 61% voted no; there were celebrations in the streets. This is not about to go away; some think the debt payment on July 20th will be the next can to be kicked down the line when Greece cannot pay the debt due. There is absolutely no way to handicap this situation, pay little to no attention to any forecasts on what will happen next!
Not a lot of movement in the European markets this morning.
Crude continues to fall which is helping to eliminate inflation
concerns. This is good for mortgage rates.
Today's Potential Rate Volatility:
High
According to Sigma Research
the risk for volatility is high today and this week. Greece and EU
continues to push the markets around with every new headline.
This will not change this week. While the market has been
extremely volatile over the last few weeks, we've continued to trade
in a very tight range.
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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