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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
Yesterday's
MBS market was better by +16 bps. According to Sigma Research there was low
volatility. Yesterday's move was potentially enough to affect
interest rates. We continue to trade in a very tight range and
today is starting off a little worse than yesterday.
Today's Rate
Forecast: Neutral
Sigma Research says that the
equity markets, a little higher today, are prressuring rates
slightly. The demonstrations in Hong Kong continued overnight, but
this does not appear to be affecting the markets. The Case-Shiller
index shows slight declines in home prices in some markets.
Unemployment numbers will be released on Friday. The bond market is
holding well, with bullish technicals. We don't expect any major
moves unless Hong Kong blows up with military force.
Today's
Potential Rate Volatility: Average
According to Sigma Research the risk for
volatility is average today. As we've been saying over the last few
days, the MBS market does not have a lot of information coming out to
move rates. We are not expecting any major moves barring military
action in Hong Kong or unexpected unemployment numbers on Friday.
Bottom Line:
I would personally suggest locking your rate and take advantage of our rate float down policy int he event rates go down further.
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