Market News: Durable Goods Orders, GDP, and Jobless Claims

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Published Date 5/28/2020

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 worsened by -1 bps yesterday. Once again rates ended mostly unchanged. However, there was a bit of intraday volatility.

Today's Rate Forecast: Neutral

Manufacturing: The April Headline Durable Goods Orders were -17.2% vs. est. of -19%. When you strip out Transportation, it was down -7.4% which is half of the market expectations of -14%.

GDP: The 1st QTR GDP was revised lower from -4.8% down to -5.0%.

Jobs: Initial Weekly Jobless Claims turned in another 2.123M unemployed vs. est. of 2.100M. Continuing Claims fell from 24.912M down to 21.052M. We have now seen over 40M filings in 10 weeks.

Housing: The April MOM Pending Home Sales Index was worse than expected, coming in at -21.8% vs. est. of -15%.

Treasury Dump: We have our 7 year Treasury note auction at 1:00 pm.ET.

Today's Potential Rate Volatility: Average

Rates continue to be extremely predictable and flat. However, when rates move sideways for this length of time, it becomes increasingly likely that we'll see a big move with extreme volatility. While we don't expect it today, increased volatility is expected.

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

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First Priority Home Loans is a DBA of Anchor Funding, Inc. NMLS #236419 & 1626581. California Bureau of Real Estate, Real Estate Broker Number 01276087. Loans made or arranged pursuant to the California Department of Business Oversight. California Finance Lenders Law license number 603 L293.