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 -65 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
These are the three things that have the greatest ability to impact rates this week. 1) Geopolitical, 2) Jobs, and 3) Treasury Auction.

1) Geopolitical: Everything you need to know about how the long bond market (particularly MBS) have reacted to the War in Iran is that we are down over 200 BPS since it started. The inflation, job and other data have taken a back seat to rising oil prices. This week will be no different.

2) Jobs: We will get the ADP 4 week rolling average and Initial Weekly Jobless Claims this week.

3) Treasury Auction: We have a round of shorter-term notes hitting the market with 2, 5 and 7 year note auctions.

This Week's Potential Volatility: HIGH
This morning markets are curently bouncing back from last week's losses. Volatility has started very high and is likely to 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.