Rate Flat As Building Permits Hit A 12-Year High

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 sideways so far today.  The MBS market improved by +6 bps yesterday. This wasn’t enough to move mortgage rates or fees.   The market experienced low volatility yesterday.

TODAY’S RATE FORECAST: NEUTRAL

Housing: October Building Permits were higher than expected (1.461M vs. est of 1.385M). The SFR component moved up by 3.2% to 909K. Housing Starts came in at 1.314M vs est of 1.32M. The SFR component moved up by 2% to 936K.

The Fed: Today, we’ll hear from NY Fed President (voting member) John Williams.

Impeachment: More testimony today. This morning Lt. Col. Alexander Vindman, a Ukraine specialist with the National Security Council and Jennifer Williams, a national security aide to Vice President Mike Pence, both previously told impeachment investigators that President Trump’s July call with his Ukrainian counterpart was inappropriate. Impeachment has not been a market mover.

TODAY’S POTENTIAL RATE VOLATILITY: LOW

Once again today, we have a light day for economic news. The markets will focus on any news on trade. Housing starts were fantastic today, and great news for housing, but will have no impact on rates or volatility.

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