Housing, Rates and Industrial Production
Published Date 5/16/2018
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 -38 bps yesterday. This was enough to worsen mortgage rates or fees. Rates experienced high volatility yesterday.
Today's Rate Forecast: Neutral
Housing: Weekly Mortgage Applications dropped by -2.7% led by a drop of -4.0% in refinance applications. Purchase applications also dropped but by half as much at -2.0%.
April New Housing Starts were lighter than expected (1.287M vs est of 1.310M). March was revised upward from 1.319M to 1.336M. Building permits were higher than estimates (1.352M vs est of 1.350). The prior month was also revised upward, from 1.354M to 1.377M. Single-family permits rose 0.9 percent to an 859,000 rate.
Industrial Production: The April MOM reading improved by 0.7% vs est of 0.6%. More importantly, March was revised upward from 0.5% to 0.7%. Capacity Utilization was very strong at 78.0% vs est of 78.3%.
Fed: Today we hear from Raphael Bostic and get the Atlanta Fed Business Inflation survey.
Japan: Industrial Production YOY 2.4% vs est of 0.5%.
Germany: CPI YOY matched expectations of 1.6%.
Eurozone: Non-monetary ECB meeting, CPI YOY 0.7% vs est of 0.7%.
Today's Potential Rate Volatility: Average
It was a wild day yesterday with a good deal of mortgage rate volatility. We're looking for rate volatility to pull back some today. We don't' have a lot of high market impacting economic news and the recent events with North Korea is injecting some uncertainty into the market.
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: TBWSAll information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
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