Home Mortgage Alliance Corporation (HMAC)

The Bank of Japan raises its key interest rate for first time in 17 years

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Published Date 3/19/2024

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 worsened by -1 bps yesterday. This was not enough to increase mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Housing: February Housing Starts were stronger than expected with an annualized pace of 1.521M units versus estimates of 1.425M. Same story with Building Permits, with an annualized pace of 1.518M versus estimates of 1.495M.

The Fed: The FOMC started two days of meetings today which will culminate with Wednesday's FOMC Interest Rate Decision and Policy Statement and updated Economic Projections.

Central Banks: The Reserve Bank of Australia kept their key interest rate at 4.35% and the Bank of Japan actually raised their interest rate for the first time in forever from -0.10% to 0.0%.

Today's Potential Rate Volatility: Low

This morning markets are trading in a narrow channel. Volatility has started low and will likely stay that way until the end of FOMC.

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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