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 -33 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: NEUTRAL
Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Jobs 2) The Fed and 3) Treasury Auction.

1) Jobs: We will finally get a jobs report out of the BLS. It will hit on Thursday and will be for September. So, its quite old data but it fills a big void. This week we will get Initial Jobless Claims, Continuing Claims, ADP weekly, NFP, Unemployment Rate, Average Hourly Earnings, Average Hourly Workweek, U6 Underemployment Rate, Laborforce Participation Rate.

2) The Fed: We have another week with a lot of Fedspeak. So far, they seem split on a cut in December while keeping the door open for one at the same time.

11/17 Williams, Jefferson, Kashkari, Waller.
11/18 Logan, Barr, Barkin.
11/19 FOMC Minutes, Atlanta Fed Business Inflation Expectations.
11/20 Hammack, Goolsbee.
11/21 Williams, Logan.

3) Treasury Auction: We have an important 20 Year Treasury Bond auction on Wednesday.

This Week's Potential Volatility: HIGH
This morning markets are seeing some support. Volatility has started at moderate levels but will increase later in the week on the jobs data.

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.