Initial Weekly Jobless Claims continue to beat expectations

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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 -16 bps yesterday. This was not enough to increase mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Housing: December New Home Sales hit 616K units on an annualized basis vs. est. of 617K, it was a slight improvement over November's annualized pace of 602K units thanks to falling mortgage rates.

Jobs: Initial Weekly Jobless Claims surprised to the downside, up only 186K vs. est. of 205K. The more closely watched 4 week moving average dropped to 198K. Continuing Claims were 1.675M vs. est. of 1.675M.

Manufacturing: December headline Durable Goods Orders were much stronger than expected, 5.6% vs. est. of 2.5%. Ex Transportation it was down -0.1% vs. est. of 0.0%. Ex Defense, it was up 6.3% vs. est. of -0.1%. Much of the gains in the headline reading were due to massive airline orders (Boeing).

GDP: The preliminary 4th QTR GDP was better than expected, 2.9% vs. est. of 2.6%, but the Price Index was higher than expected, up 3.5% vs. est. of 3.3%. But this is not as good of a report as the headline might suggest. It was largely driving by increases in inventory investment, consumer spending, government spending, and business investment that were partly offset by decreases in housing investment and exports. Real Final Sales to Private Domestic Purchasers - which strips out things like trade and inventories- we get a far worse number of just 0.2% in Q4. This was the lowest print since the covid crash!

Treasury Sales: We have a 7 year note auction at 1 pm ET.

Today's Potential Rate Volatility: High

This morning markets were pressured by the deluge of economic data. Volatility has started high but will moderate later in the day as markets prepare for tomorrow's PCE.

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.

All loans are subject to credit approval. Interest rates are subject to change daily and without notice. Current interest rates shown our indicative of market conditions and individual qualifications and will vary upon your lock-in period, occupancy, loan type, credit score, purpose and loan to value and lending source. Income and mortgage proctection producst are subject to client's suitability and affordability (DOI Lic# 4334805). 

Jonathan Caguioa

Mortgage Advisor

NMLS: 250609 / DRE 01137630

Allianze Mortgage Services

15820 Whittier Blvd. Suite G, Whittier CA 90603

Company NMLS: 346138 / DRE 01403147

Office: 949-241-2527

Cell: 949-241-2527

Email: lenderguide@allianzemortgage.com

Web: https://mortgage2000.org/