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 -12 bps last week. This was not enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: NEUTRAL
Three Things: that have the greatest ability to impact rates this week. 1) The Fed, 2) Jobs and 3) Treasury Auction.

1) The Fed: We will get the FOMC Interest Rate Decision and Policy Statement Wednesday at 2 pm ET. The bond market is assuming that there will be a 25 BPS cut. The focus will actually be on their Economic Projections (dot plot chart). The bond market will be very sensitive to changes that signal either more or fewer cuts in 2026 compared to the prior release.

2) Jobs: Each jobs release is very important given that we did not get the BLS release last Friday. This week we have ADP, JOLTS and Continuing Claims.

3) Treasury Auction: We have a big week for longer term Treasuries that will hit the market. Wednesday's 30 YR Bond auction is the most important.

12/08 3 year note.
12/09 10 year note.
12/10 30 year bond.

This Week's Potential Volatility: HIGH
This morning markets have started under heavy pressure. Volatility has started at high levels and will stay that way until Wednesday at least.

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.