Home Mortgage Alliance Corporation (HMAC)

Small business optimism higher than expected for December

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Published Date 1/9/2024

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 today. The MBS market improved by +3 bps yesterday. This was not enough to decrease mortgage rates or fees. The market experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Optimism Index: The December NFIB Small Business Optimism Index was higher than expected, 91.9 versus estimates of 90.7.

Trade Balance: The November Goods and Trade Services Balance (aka trade deficit) was -$63.2B versus estimates of -$65.0B.

The Fed: Today we will hear from Vice Chair Barr at 1 pm ET.

Treasury Auction: We kick off three days of flooding the market with our government debt with today's shorter term 3 year note at 1 pm.

Today's Potential Rate Volatility: Neutral

This morning markets are neutral. Volatility has started a little choppy within a narrow trading channel.

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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