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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
Rates last week improved slightly, as reported by Sigma Research. The improvment last week for the MBS market was +38 basis points, which may mean a slight improvement in mortgage pricing.
This Week's Rate Forecast: Neutral
According to Sigma Research, the market should be relatively unchanged until Wednesday when Janet Yellen speaks. However, we are not expecting anything too dramatic from her. Thursday's June unemployment report could be a market mover as well. We have not changed the forecast from neutral due to the continued tight range in the market.
This Week's Potential Volatility: AVERAGE
Sigma Research says that there're a lot of market moving reports coming out this week that could cause higher volatility toward the end of the week. The big report is the unemployment rate on Thursday and this could finish the week off going into the long weekend with big swings in the market.
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. |
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