Market Commentary

For the week of April 15, 2019

THREE THINGS THAT CAN MOVE RATES THIS HOLIDAY WEEK

 

THIS WEEK'S MORTGAGE RATE SUMMARY

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.

RATES CURRENTLY TRENDING: NUETRAL

Mortgage rates are trending sideways to slightly higher so far today.  Last week the MBS market worsened by -35bps.  This was enough to move rates or fees higher last week. We saw good deal of rate volatility at the end of the week.

THIS WEEK'S RATE FORECAST: NEUTRAL

Three Things: These are the three areas that have the greatest ability to impact your rates this week: 1) Trade, 2) Across the Pond and 3)Fed

1) Trade: Speculation, leaks and any actual announcements of progress (meeting dates set, etc.) can have a significant impact on rates.

2) Across the Pond: We have a lot of big economic releases that will hit this week which will give us a better understanding of global growth (or lack thereof) which includes GDP data out of China and preliminary PMI data out of Germany and the Eurozone.

3) Fed: The highlight of the week will be Wednesday's release of the Fed's Beige Book which is prepared ahead of their next FOMC meeting. But we also will hear from a few key voting members this week.

THIS WEEK'S POTENTIAL VOLATILITY: AVERAGE

We have a shortened holiday week. The bond market will close early on Thursday and reopen on Monday. Short of something unexpected with trade or overseas economic numbers, look for rates to trade in a narrow channel.

BOTTOM LINE:

IIf 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.