Ryan's Rate Commentary

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
Mortgage rates are under pressure today. The MBS market worsened by -33 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: NEUTRAL
Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Geopolitical, 2) Inflation and 3) Central Banks.

1) Geopolitical: There is a lot going on this week starting with the WEF in Davos where the United States will present/speak tomorrow. We have Greenland, Iran, Venezuela, et all to focus on as well as our Supreme Court ruling on Tariffs.

2) Inflation: We get the Fed's Official measure of inflation, Core PCE on Thursday.

3) Central Banks: We will get key interest rate decisions out of China and Japan with the focus on Japan.

Treasury Auction: We have an important 20 Year Treasury Bond auction on Wednesday.

This Week's Potential Volatility: HIGH
This morning markets are seeing some pressure. Volatility has started high and will likely stay that way all week.

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.