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 worsened by -7 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) Manufacturing and 3) The Consumer.

1) Geopolitical: The bond market will be taking a long view of the new Tariff entanglement, the President's State of the Union address, and probable Iran military action.

2) Manufacturing: Have we actually turned the corner? After more than 3 years of contraction in the manufacturing base, we have had a recent run of expansionary manufacturing data. This week get Chicago PMI, Factory Orders, Richmond Fed and Dallas Fed.

3) Consumer: Consumer Sentiment on Tuesday will be key. It is expected to rise to 88.0, readings above 90 can be negative for rates.

This Week's Potential Volatility: HIGH
This morning markets are moving sideways. Volatility has started at moderate levels but will likely increase later in the 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.