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 worsened by -5 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
These are the three things that have the greatest ability to impact rates this week. 1) Jobs, 2) Geopolitical, and 3) ISMs

1) Jobs: We have a lot of job and wage related data all week long which culminates with Big Jobs Friday where we will get NFP, Unemployment and Average Hourly Earnings.

2) Geopolitical: A lot of movement over the weekend with Geopolitical events, how those unfold for the rest of the week can have a big impact on long bonds.

3) ISMs: The PMIs and Employment Components of the Manufacturing and Services ISM releases are the most important data points of the week outside the Payroll data.

This Week's Potential Volatility: HIGH
This morning markets are seeing a small boost on geopolitical concerns. Volatility has started at moderate to high levels and could easily become high 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.