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:
Mortgage rates are moving sideways today. The MBS market worsened by -2 bps yesterday. This was not enough to affect mortgage rates or fees. The market experienced low volatility yesterday.
Today's Rate Forecast:
Housing: Weekly Mortgage Applications dropped by -6.3%. Refinances fell by -7.0% while Purchases were down -5.0%
Central Bank: The People's Bank of China kept their key interest rate at 3.85%.
The Fed: We will hear from Evans, Bostic, Kashkari, Quarles, Bullard and Daly today. We also get the Fed's Beige Book today at 2 pm.
Treasury: We have a 20 year Treasury Bond auction today at 1 pm.
Today's Potential Rate Volatility:
This morning we're seeing sideways movement in the rate markets. Volatility is low ahead of the Beige Book, if that contains anything unexpected we may see a spike but otherwise volatility should stay moderate to low.
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.