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: HIGHER
    Mortgage rates are moving higher today. The MBS market worsened by -113 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.


    This Week's Rate Forecast: HIGHER
    Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Inflation, 2) Manufacturing and 3) The Fed.

    1) Inflation: We get the Fed's preferred inflation measure on Friday. The problem is that both Core PCE and Headline PCE are expected to move higher in this latest release.

    2) Manufacturing: We get a big dose of manufacturing data this week with Durable Goods Orders, Chicago PMI and the Richmond Fed.

    3) The Fed: Now that the media blackout is over, we will hear from a slew of Feds this week:

    09/26 Susan Collins, Raphael Bostic, Loretta Mester
    09/27 Charles Evans, James Bullard, Mary Daly
    09/28 Raphael Bostic, James Bullard, Charles Evans, Jerome Powell
    09/29 Loretta Mester, Mary Daly
    09/30 Lael Brainard, John Williams

    This Week's Potential Volatility: HIGH
    This morning markets are under heavy pressure due to the Bank of England. Volatility has started extremely high and will likely not calm down.


    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.

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