Shiny Trinket

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

Yesterday's MBS market was worse by -9bps.  According to Sigma Research there was low volatility. Yesterday's move may've been enough to worsen rates or fees.   So far today the MBS market is trading a little lower (worse rates).

Today's Rate Forecast: Neutral

Sigma Research says MBS prices opened weaker this morning; not much of surprise with the FOMC policy statement this afternoon (2:00 pm). Generally markets still holding the idea that the Fed will move to increase the Federal Funds rate at the Sept. meeting. Janet Yellen told politicians in her recent testimony that employment, “has continued to show progress toward our objective of maximum employment,”…. “the labor market is getting demonstrably closer…to a more normal state.” This is helping to fuel speculation that the Fed will continue with the idea of increasing rates in September. Weekly mortgage applications from MBA; increased 0.8%, purchase apps down 0.1% while re-finances up 2.0% from the prior week. While applications are a little softer from previous month, but up 18% Yr/Yr.

Today's Potential Rate Volatility: Moderate

According to Sigma Research the risk for volatility is moderate to high today.  With the FOMC speaking today we may see some market moving news.  The biggest risk is at about 2:00- 3:00 PM EST.  We'll be keeping an eye on the market today for sure.

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.

I welcome the opportunity to work with those who want to buy but for various reasons aren't able to-today.Everyone starts with Step #1 - it may take some longer than others.My purpose is to help everyone who wants to own a home–no matter what the obstacles or the time that it takes.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

Equal Housing Lender. This is not a commitment to lend or extend credit. Restrictions may apply. Rates may not be available at time of application. Information and/or data are subject to change without notice. All loans are subject to credit approval. Not all loans or products are available in all states. Bay Equity LLC, 100 California Street Suite 1100, San Francisco, CA 94111-4561; NMLS ID#76988. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act- #4150077; NMLS consumer access: www.nmlsconsumeraccess.org NMLS ID#76988