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 -16 bps last week. This was not enough to increase mortgage rates or fees. The market experienced moderate volatility last week.

This Week's Rate Forecast: NEUTRAL
Three Things: These are the three areas that have the greatest potential to impact rates this week. 1) The Fed, 2) Central Banks and 3) Treasury Auction.

1) The Fed: This is the last week before the Fed's media "blackout" period that leads up to their November Fed Meeting. So, this is the last chance for Fed speakers to get their opinions out there.

10/21 Daly, Logan, Kashkari and Schmid
10/22 Harker
10/23 Bowman, Barkin and the Beige Book
10/24 Hammack

2) Central Banks: We will get key rate decisions out of China and Canada, both are expected to cut rates. The amount of the cuts and the forward guidance will have an impact on rates.

3) Treasury Auction: We have an important 20 year Treasury Bond auction on Wednesday at 1 pm ET.

This Week's Potential Volatility: HIGH
This morning markets took a big initial hit. Volatility has started high but will likely moderate later in the week.

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.