Published Date 10/18/2021
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 slightly higher today. The MBS market worsened by -15 bps last week. This was may have been enough to increase mortgage rates or fees. The market experienced moderate to high volatility last week.
Today's Rate Forecast:
High
Three Things: These are the three areas that have the greatest ability to impact your rates this week. 1) The Fed, 2) Central Bank and 3) Manufacturing
1) The Fed: We are just a couple of weeks away from the next FOMC meeting where the bond market is expecting an official taper announcement. Wednesday's Beige Book is prepared specifically in advance of that meeting and will be utilized by the Committee in their evaluation of the economy and their policy. We also hear from several key members this week:
10/18 Neel Kashkari, Randall Quarles
10/19 Michelle Bowman, Christopher Waller, Mary Daly, Patrick Harker, Raphael Bostic
10/20 Randall Quarles, Charles Evans, James Bullard
10/21 Fed's Balance Sheet
2) Central Bank: We get a get interest rate decision out of the People's Bank of China specifically in light of the financial melt down due to Evergrande's defaults. But the Bank of England is getting a lot of attention after BoE governor Bailey said over the weekend that the central bank “will have to act” on inflation.
3) Manufacturing: We get some key readings this week with the Philly Fed and the flash composite PMIs.
Today's Potential Rate Volatility:
High
This morning we're seeing a negative trend. Volatility is high as markets consider inflation and the Bank of England's implied interest rate hike.
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
All 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.
NMA Home Loans is Licensed by the California Department of Real Estate under License # 01111689 and NMLS # 320740