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 lower so far today.
The MBS market improved by +4 bps yesterday. This
caused rates or fees to move sideways for the day.
The rates experienced low volatility yesterday.
Today's Rate Forecast:
Jobs: It's Big Jobs Friday! Very interesting results and a significant divergence from market expectations. Here is the tale of the tape:
- April Non-Farm Payroll additions (NFP) 266K vs. est. of 978K.
- March NFP revised lower from 916K to 770K
- February NFP revised upward from 468K to 536K
- The rolling three-month average is now 524K
- The headline Unemployment Rate increased from 6.0% to 6.1%; expectations were for a drop to 5.8%
- The U6 Underemployment Rate dropped from 10.7% to 10.4%
- Participation Rate increased from 61.5% to 61.7%
- The Average Hourly rate increased by 21 cents to $30.17
- MOM it increased by 0.7% vs. est. of 0.0%
- YOY it increased by 0.3% vs. est. of -0.4%
- Average weekly hours increased to 35.0 from 34.9
Today's Potential Rate Volatility:
The jobs numbers were a big miss today, helping to push rates lower and spiking volatility. We expect rate markets to continue the volatility through today as markets digest the jobs data.
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.