The Reserve Bank of Australia has surprised markets

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Published Date 10/4/2022

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: Lower

Mortgage rates are moving slightly lower today. The MBS market improved by +58 bps yesterday. This was enough to decrease mortgage rates or fees. The market experienced high volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: The August (old data) Job Openings and Turnover Survey (JOLTS) was lighter than expectations (10.053M vs. est. of 10.45M). This is a smaller amount than July's 11.17M but its still a VERY LARGE amount of open positions. Generally anything above 7M is considered quite high.

Manufacturing: Factory Orders has followed the trend of weaker than expected manufacturing data, coming in flat at 0.0 vs. est. of an expansion of 0.3%.

Central Banks: No Thunder from Down Under. The Reserve Bank of Australia surprised the markets by raising their key interest rate to only 2.60% vs. a widely expected hike to 2.85%.

Today's Potential Rate Volatility: High

This morning markets continue to see mild support. Volatility is relatively high as markets continue to trade on speculation.

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.

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Atiba Thompson

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