|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
According to Sigma Research, at 9:30 the DJIA opened +42 after closing down 55 yesterday. Mortgage rates were essentially unchanged from yesterday.
Today’s Rate Forecast: Neutral
According to Sigma Research, China’s economy continues to slow. Oil hit a new low at $52.72. These two items are positive for rates; falling oil prices means that inflation is even less of a concern to investors.
Today’s Potential Rate Volatility: High
According to Sigma Research the risk for volatility is somewhat high today. The bond and mortgage markets will close at 2:00 EST today. Although the market is technically bullish (slightly lower rates), the low trading volume can often lead to surprise volatility.
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.