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 some support today. The MBS market improved by +21 bps last week. This may have been 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) Jobs, 2) Tariffs, 3) ISMs.

1) Jobs: We will get a ton of job and wage related data this week leading up to Big Jobs Friday. These include ISMs, ADP, JOLTS, Challenger Job Cuts, Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings and more. The bond market will be very sensitive to this data.

2) Tariffs: The Tariffs on Canada and Mexico were announced Saturday and will officially go into effect in less than 24 hours.

3) ISMs: As far as domestic economic data outside of Jobs, ISM Manufacturing and ISM Services will get the most attention as bond traders will focus on Prices Paid and Employment components.

This Week's Potential Volatility: HIGH
This morning markets are getting a boost on tariff fears. Volatility has started high and will likely remain that way.

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.