Published Date 9/29/2017
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.
Mortgage rates are moving sideways so far today. The MBS market improved by +1 bps yesterday. This wasn't enough to improve mortgage rates or fees. The market experienced moderate volatility yesterday.
Personal Outlays: August Personal Income (0.2%) and Personal Spending (0.1%) both matched market expectations. The Headline PCE YOY remained unchanged from July's pace of 1.4%. The Core PCE YOY number dropped from 1.4% to 1.3%. Fairly tame data in the Fed's key measure of inflation but inline with market expectations.
Manufacturing: The bell-weather Chicago PMI was very robust, coming in at three-year high of 65.2 vs est of 58.5. Any reading above 50.0 is expansionary, and readings above 60.0 are very rare.
Consumer Confidence: The final reading for the University of Michigan's Index was revised from 95.3 to 95.1. That is also (95.1) the final reading for August, this is moving sideways.
Fed: Today we hear from Patrick Harker.
Germany (number 4 economy): Retail Sales were much worse than expected (-0.4% vs est of +0.5%) but their Unemployment Rate was better than expected (5.6% vs est of 5.7%).
Great Britain (number 5 economy): They revised their 2nd QTR YOY GDP down from 1.7% to 1.5%, but the QoQ gain remained at 0.3%. Meanwhile, Business Investment jumped by 2.5% in the 2nd QTR.
Spain (number 14 economy): A big vote this weekend (maybe) on Catalonia independence.
Inflation is still very tame, but we had strong manufacturing numbers. Because of that, mortgage rates will continue to trade in a tight range with modest volatility going into the weekend.
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.
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
NMLS: 256707
Cell: 818-943-2712
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