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 moving sideways today. The MBS market improved by +7 bps last week. This was not 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) Jobs, 2) Inflation and 3) Retail Sales

1) Jobs: We have Big Jobs Wednesday as we get the delayed data from last week. The overall job picture last week was one of labor softening. The bond market will be focusing on the massive expected revisions to the prior data just as much as the current round of NFP.

2) Inflation: The Delayed CPI report will hit Friday and the bond market will be very sensitive to any increase in the MOM and YOY trends.

3) Retail Sales: The top of the Food Pyramid for economic data. Here is where the rubber meets the road - does the recent consumer "survey" data from UofM and the Conference Board correlate into weak Retail Sales or does their continue to be very little correlation between what consumers say and what they do.

Treasury Auction: Here is this week's Treasury auction schedule:

02/10 3 Year Note
02/11 10 Year Note
02/12 30 Year Bond

This Week's Potential Volatility: HIGH
This morning markets are trading sideways without any major reports to work off of. Volatility has started low but will become high as we get some of our major reports in.

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.