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 getting support today. The MBS market improved by +4 bps last week. This was not enough to decrease 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) Inflation, 2) The Fed and 3) Retail Sales.

1) Inflation: We will get several key inflation related data releases this week with CPI, PPI and Import Prices with the most weight being given to Core CPI on Tuesday.

2) The Fed: We will hear from Fed Chair Powell twice this week as he gives his semi-annual testimony to the House and Senate. We also have a packed week of Fed speakers:

02/11 Hammack, Williams, Powell
02/12 Bostic, Bowman, Powell

3) Retail Sales: We will get January Retail Sales on Friday and is expected to contract by -0.1% on a MOM basis for the headline number.

Treasury Auction: Here is this week's Treasury auction schedule.

02/11 3 year note
02/12 10 year note
02/13 30 year bond

This Week's Potential Volatility: HIGH
This morning markets saw some support. Volatility has started high with lots more to come with the pending inflation data.

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.