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: HIGHER
Mortgage rates are moving higher today. The MBS market worsened by -12 bps last week. This was not enough to increase mortgage rates or fees. The market experienced moderate volatility last week.

This Week's Rate Forecast: HIGHER
Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Jobs, 2) The Fed and 3) Manufacturing. 1) Jobs: We get a ton of job and wage related data all week culminating in Big Jobs Friday. The bond market will be very sensitive to the pace of wage increases and number of job additions.

04/01 ISM Manufacturing - Employment Index

04/02 JOLTS

04/03 ADP Payrolls and ISM Services - Employment Index

04/04 Challenger Job Cuts, Initial Weekly Jobless Claims

04/05 Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings, Average Weekly Hours, U6 Underemployment Rate, Labor force Participation Rate.

2) The Fed: We have a packed calendar for Fed speeches this week, the bond market will be keen to see if Waller and Bostic's sentiment is an outlier or main stream among the Fed.

04/01 Cook

04/02 Bowman, Daly, Williams and Mester

04/03 Powell, Bowman, Goolsbee, Barr and Kugler

04/04 Harker, Barkin, Kashkari

04/05 Logan, Bowman

3) Manufacturing: After some very disappointing regional manufacturing data last week, we will get the national ISM Manufacturing on Monday and Factory Orders on Tuesday.

This Week's Potential Volatility: HIGH
This morning markets are taking a hit due to last week's PCE revisions. Volatility has started high and will continue to be high as we get data 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.