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 -8bps.  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 as we all know by now, the Fed wants to increase rates to end its zero rate policy. What is debatable is when, Sept is still what the consensus is but the global picture puts some uncertainty to the timing. One argument we have heard is that the Fed wants to increase the Federal Funds rate so if necessary it can lower it again if the worst case scenario develops for the US and global growth falters. Still have Greece out there and China, while difficult to measure accurately because of government manipulation, is no doubt slipping; the degree is the debate now. In Greece there is more arguing in the parliament between left wing opponents that still fight the austerity package that its prime minister agreed to and parliament voted for last week. August 20th is coming quickly when a creditor deal has to be resolved or Greece will default on another payment, this time to the ECB.

Today's Potential Rate Volatility: Moderate

According to Sigma Research the risk for volatility is moderate today.  A few economic numbers were released this morning, but they really didn't have an affect on mortgage rates.  We don't expect much movement today, but as always we'll be keeping our eye on the market.

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