CHM Blog

Neutral

Neutral

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

Mortgage rates are getting some minor support today. The MBS market changed by +0 bps last week. This was not enough to change mortgage rates or fees. The market experienced low volatility last week.

This Week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Geopolitical, 2) Manufacturing and 3) Treasury Auction.

1) Geopolitical: Concern over the U.S. retaliatory strikes in Iraq and continued concern over the Red Sea, Gaza, Russia and more will be on top of minds of traders this week with limited economic news to drive markets.

2) Manufacturing: We get the bellwether Chicago PMI this week along with the Richmond Fed Manufacturing Index.

3) Treasury Auction: We have one last batch of debt to dump into the marketplace before the year ends. Demand for our debt will be a large factor.

12/26 2 year note

12/27 5 year note

12/28 7 year note

This Week's Potential Volatility: Low

This morning markets are getting some minor support on geopolitical concerns. Volatility has started low and is likely to stay that way baring major disasters.

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.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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