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 so far today.
The MBS market
worsened by -2 bps yesterday. This
caused rates or fees to remain unchanged for the day.
The rates experienced moderate volatility yesterday.
Today's Rate Forecast:
Leading Indicators: The September data set fell by -0.1% vs. est of 0.0%.
The Fed: Today, we get Robert Kaplan, Esther George, Neel Kashkari, and Richard Clarida.
Trade War: The new US tariffs on $7.5B of European goods have just kicked in, and Cheese, wine, olives, and many other European goods will be subject to a price hike.
China: Retail Sales 7.8% vs est of 7.8%, Industrial Production 5.8% vs est of 5.0%, GDP Q3 YOY 6.0% vs est of 6.1%. Even though that is three times the rate of US growth, it is the lowest growth rate for China since 1992.
Today's Potential Rate Volatility:
Rates are once again moving sideways for the day. This has been the case for most of the week. Rates are likely to move sideways for the rest of the day, heading into the weekend. The Brexit vote will happen this weekend and will play a big roll in how rates react Monday. If a deal gets approved, we're likely to see rates jump. If the agreement is squashed, all else being equal, we're likely to see rates dip.
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.