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 some support today. The MBS market worsened by -17 bps last week. This was not enough to increase 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) Geopolitical, 2) Jobs and 3) Retail Sales.

1) Geopolitical: This has been and will continue to be the dominate force in all marketplaces for several weeks if not months.

2) Jobs: We will have Big Jobs Friday just before an early market close. Throughout the week we will get some form of job and wage related data ranging from ISMs to Weekly Claims.

3) Retail Sales: The top of the food pyramid.

This Week's Potential Volatility: HIGH
This morning markets are seeing a small bounce back from last week. Volatility has started at moderate levels but will likely increase later this week

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.