Durable goods orders push rates higher

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Published Date 9/27/2017

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: Higher

Mortgage rates are moving higher so far today.  The MBS market improved by +1 bps yesterday. This wasn't enough to improve mortgage rates or fees.   The market experienced low volatility yesterday.

Today's Rate Forecast: Higher

Location: Weekly Mortgage Applications moved slightly lower by -0.5%. Refinances dropped by -4.0% while Purchase increased by +3.0%.

August Pending Home Sales -2.6% vs est of -0.5%. Realtors cite hurricane and lack of demand as culprits

Durable Goods: This data was much better than expected. The headline August reading came in at 1.7% vs est of only 0.7%. When you strip out the volatile transportation sector, it increased by 0.2% which matched market expectations. The prior month (July) was revised upward from 0.5% to 0.8%. The Core Durable Goods Orders (nondefense and non-aircraft) came in three times higher than expectations (0.9% vs est of 0.3%).

Fed: Today we hear from Neel Kashkari, James Bullard, and Eric Rosengren.

Treasury Auctions: We get our 5-year note at 1EST.

Tax Reform: We will finally get the official release (details have been leaking all week) of the proposed Tax Reform.

Germany: The German Finance Minister Schauble is out. He is leaving to head up the Bundestag which the Lower House of their government. This leaves a vacancy in Europe's strongest economy.

Today's Potential Rate Volatility: High

Mortgage rates are moving a little higher due to the strong durable goods orders and the release of the tax reform bill. Look for a move higher, but we're likely to continue to trade in our very tight range.

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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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.

Fred Gruber

CMPS

NMLS: 256707

First Rate Financial Group

3027 Townsgate Rd., Suite 110, Westlake Village CA 91361

Company NMLS: 1777223

Office: 800-620-8802

Cell: 818-943-2712

Email: fred@fredgruber.com

Web: http://Fredgruber.com