|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 worse by -29 bps. According to Sigma Research there was average to high volatility. Yesterday’s move was likely enough to affect rates or fees. So far today the MBS market is essentially unchanged.
Today’s Rate Forecast: Neutral
Sigma Research says that this morning weekly jobless claims at 8:30 AM were thought to have declined 8K to 286K, as reported +1K to 295K. The 4 week average increased from 282,750 to 284,500. Claims have stayed under 300K for weeks (7) but the last month have been stuck at this level. Mortgage rates were not affected by jobs numbers. We expect the rest of the day to continue to trade in this tight range. The only thing that could seriously move mortgage rates is an unexpected deal with Greece.
Today’s Potential Rate Volatility: Average
According to Sigma Research the risk for volatility for today is average. We continue to trade in a very tight range, and we don’t expect that to change today.
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.