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 +29 bps last week. This was enough to decrease 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) Retail Sales, 2) Inflation and 3) Thanksgiving.

1) Retail Sales: We will get the Retail Sales report from September that had been delayed. Although, real-time data from this week's Black Friday Week will likely garner more attention from markets.

2) Inflation: We got the CPI for September during the Government Shutdown but we never got the PPI side of things. That will hit Tuesday.

3) Thanksgiving: We have a holiday-shortened week with Thanksgiving on Thursday. The bond market is CLOSED on Thursday and then will reopen for a partial day on Friday and close EARLY at 2 pm ET.

Treasury Auction: We have shorter term Treasury auctions this week.

11/24 2 year note.
11/25 5 year note.
11/26 7 year note.

Central Banks:
We will get an important Interest Rate Decision and Policy Statement out of the European Central Bank on Thursday.

This Week's Potential Volatility: NEUTRAL
This morning markets saw some rocky trading that has left us with some mild support. Volatility has started at moderate to high levels but will likely moderate as we approach Thanksgiving.

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.