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

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

1) Geopolitical: Now that the hammer has dropped on Iran, (which the bond market had already largely accounted for), the bond market will focus on oil prices and length of the conflict.

2) Jobs: We have seemingly been stuck in a low hire but low fire trend. Last month's NFP saw significant revisions downward to the tune of 1M and made the average for 2025 only 15K jobs per month.

3) ISM: ISM Manufacturing was solid when last released and is expected to see another expansionary data point. The bond market will be focusing on the PMIs but really looking at Prices Paid.

This Week's Potential Volatility: HIGH
This morning markets have started under pressure due to rising oil costs. Volatility has started high and will likely stay that way all 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.