Daily Mortgage Trends – Al Hensling

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

Sigma Research says that rates are trending slightly worse this morning.  The MBS market improved by +21 BPS yesterday.  This was probably enough to improve rates or fees.  The market highly volatile yesterday.

Today’s Rate Forecast: Neutral

According to  Sigma Research China continues to throw off weak data, once again the Fed believes China may be about ready to turn the corner after two years of economic slide. This morning China reported exports declined 3.7% y/y in November, more than analyst expectations. Chinese imports declined 5.6% y/y, less than expected and the 16% decline in October. U.K. manufacturing production unexpectedly fell 0.4% m/m in October after climbing 0.9% in September. Overall, a weak chineese economy is positive for mortgage rates. We noted last Thursday to be alert to volatility, since then markets have been unsettled. The bond and mortgage markets took huge hits last Thursday on disappointment that the ECB would not stimulate at the level widely expected based n comments frm Mario Draghi. Friday the bond and mortgage markets improved and yesterday more improvement.

Today’s Potential Rate Volatility: High

According to Sigma Research the risk for volatility is high today.  As noted above, the markets have been unsetteled and are trying to find their footing.

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.

Al Hensling is ranked among the Top 50 Loan Originators in the Nation for the past 25 Years Direct Lender offering Solution based Lending. From First Time Buyers to Reverse Mortgages we have a Loan Program to suit your needs.

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