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: NEUTRAL

Mortgage rates are moving slightly higher so far today.  The MBS market improved by +1 bps yesterday. This wasn’t enough to improve mortgage rates or fees.   The rates experienced low volatility yesterday.

TODAY’S RATE FORECAST: NEUTRAL

Housing: The January Case Shiller 20 city metro YOY Home Price Index rose by 3.1% vs. est. of 3.2%.

Manufacturing: The March bell-weather Chicago PMI was much better than expected (47.8 vs. est. of 40.0) but still was in contraction territory with a sub-50 reading.

Coronavirus: Here are this morning’s headlines that are getting the attention of bond traders.

• US reports first daily jump of +500 deaths.
• US cases now above 165,000 and deaths above 3,175.
• Global Cases now above 800K.
• Spain’s death toll jumps by 850 in 24 hours.
• Dr. Fauci warns that the virus can return in the Fall.
• CDC weighs asking Americans to wear masks at all times outside of their homes.

TODAY’S POTENTIAL RATE VOLATILITY: HIGH

Rate volatility is likely to be very high today as it has been for the last few weeks. Markets are starting to look at the economic numbers now that some of the data is reflecting post-coronavirus data.

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.

Source: TBWS