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: LOWER
Mortgage rates are moving lower 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) The Fed, 2) Central Banks, and 3) Geopolitical.

1) RThe Fed: We will get the Fed's Interest Rate Decision and Policy statement on Thursday (typically its on a Wednesday but moved due to the election), followed by a live Presser with Fed Chair Powell. The bond market is currently pricing in a 25BPS move lower. This is NOT a meeting where they release their Economic Projections (dot plot).

2) Central Banks: We get a couple of Central Banks meeting this week with the focus on the Bank of England which is expected to cut rates by 25BPS.

3) Geopolitical: The Election on Tuesday could have a dramatic impact on rates.

Treasury Auction: We have a big week for auctions.

11/04 3 year note
11/05 10 year note
11/06 30 year bond

This Week's Potential Volatility: HIGH
This morning markets are moving lower. Volatility has started high and will stay that way this 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.