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 a little support today. The MBS market improved by +17 bps last week. This was not enough to decrease 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) The Fed, 2) Manufacturing and 3) Geopolitical.

1) The Fed: We will get the Minutes from the last FOMC meeting on Tuesday (normally hits on a Wednesday). These Minutes are key as they are from a meeting that released the Economic Projections (dot plot chart), lowered the interest rate and had some dissenting votes.

2) Manufacturing: Chicago PMI on Tuesday is a pivotal read in the manufacturing sector.

3) Geopolitical: We would normally have Big Jobs Friday this week but it has been pushed to next week so we really don't have much to digest this week which means more attention will go to Geopolitical events.

This Week's Potential Volatility: NEUTRAL
This morning markets continue to see some support. Volatility has started at moderate to low levels.

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.