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:
Higher
Mortgage rates are moving higher today. The MBS market worsened by -80 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.
This Week's Rate Forecast: Higher
Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) The Fed, 2) Retail Sales and 3) Geopolitical
1) The Fed: This is the last week of open communication from the Fed before next week's media blackout period that leads up to their next FOMC meeting.
2) Retail Sales: This is the most important data set of the week. The stronger this data is, the worse it will be for rates and vice versa.
3) Geopolitical: The IMF starts a full week of meetings and the markets will be very sensitive to Iran/Israel, etc.
This Week's Potential Volatility:
High
This morning markets are moving higher on the retail sales data. Volatility has started high and will remain high this week as markets adjust to new trading 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. |