TODAY’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: LOWER
Mortgage rates are moving lower so far today. The MBS market improved by +22 bps yesterday. This was enough to improve mortgage rates or fees. The market experienced moderate volatility yesterday.
TODAY’S RATE FORECAST: LOWER
Consumer Sentiment: The previously released February reading was revised upward from 95.7 to 96.3 which just edged out forecasts calling for 96.0…a very solid reading but not a block buster.
New Home Sales: Climbed higher but at a slower than expected pace. New Home Sales in January hit 555K (or a MOM gain of 3.7%) which was lower than market expectations of 570K units.
Geo-political: Euro systematic risk (France, Italy and to a lesser extent Germany) have caused German bund yields to contract (lower rates) as investors seek a safe haven as risk over elections weigh on their positions.
President Trump will give the first address by a president in his first year since Ronald Reagan to an annual gathering of conservative activists (CPAC). Any comments about tax or stimulus will get some attention but most likely, the markets will get more ammo from Tuesday’s address in front of Congress.
Oil: WTI Oil prices have been falling this morning (anti-inflationary) as inventory levels have risen.
TODAY’S POTENTIAL RATE VOLATILITY: MODERATE
We expect mortgage rates to improve slightly today with relatively low volatility. The wild card is President Trump’s address to CPAC, if he pushes a “protectionist trade agenda” it will be positive for mortgage rates, but if he speaks more about lower taxes and regulations then that could push mortgage rates higher.
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.
Source: Lo Socialbot