|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
Yesterday’s MBS market was even for the day. According to Sigma Research there was low volatility. Yesterday’s was not enough to affect rates or fees. So far today the MBS market trading slightly lower (worse rates).
Today’s Rate Forecast: Neutral
Sigma Research says that once again today there’s not anything due out that will likely affect mortgage rates. Greece is in the headlights; after a few months of not much interest in Greece markets are now fully focused on Greek debt discussions with varying fears and concerns. Another critical meeting set for Friday, the government looking under every rock to find more money ordering local governments to transfer funds to the central bank will keep the country afloat until the end of May. The new Greek government an anti-austerity coalition government has repeatedly expressed confidence that a deal to free bailout disbursements was imminent, however so far they appear to be fooling themselves as the IMF and EU officials are not nearly so confident. What does all of this mean for mortgage rates? As long as the situation in Greece is up in the air, US Treasuries will have some support. However, once the situations materially changes there, the mortgage rate market will experience a big swing one way or the other.
Today’s Potential Rate Volatility: Low
According to Sigma Research the risk for volatility for today is average to low today. We continue to trade in a very tight range and we don’t think there’ll be any news today to push us out.
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.