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 under a little pressure today. The MBS market improved by +19 bps last week. This was not enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: NEUTRAL
Three Things: These are the three things that have the greatest ability to impact rates week. 1) Geopolitical, 2) Jobs, 3) The Fed.

1) Geopolitical: With the backdrop of ongoing global conflicts, we now have more Tariff Turmoil as an U.S. Appeals Court has ruled that the President does not have the authority to implement some of the tariffs. This will eventually end up in the Supreme Court and the tariffs will stay in place until then. However, new tariffs under that specific program will not happen.

2) Jobs: It will be Big Jobs Friday this week. But every day we will have a job or wage related data point with a deluge of other reports. On Friday, the focus will be on the revisions to the Non-Farm Payrolls and to see if the Unemployment Rate ticks up.

3) The Fed: We will get the Fed's Beige Book on Wednesday and have a slew of talking Feds this week. But the speakers on Friday will get the most weight.

This Week's Potential Volatility: HIGH
This morning markets started under pressure due to renewed uncertainty around tariffs. Volatility has started at moderate to high levels and will likely stay that way 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.