Published Date 2/21/2023
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 higher today. The MBS market worsened by -19 bps last week. This was not enough to increase mortgage rates or fees. The market experienced high volatility last week.
Three Things: These are the three areas that can have the greatest impact on rates this week. 1) Inflation, 2) The Fed and 3) Central Banks
1) Inflation: The Fed's preferred key measure of inflation, PCE will hit this Friday. The headline number is expected increase by 0.5% (5 times higher than the previous month) and Core (ex food and energy) is expected to rise by 0.4%. The bond market will give a lot of weight to this release.
2) The Fed: We will get the Minutes from the last FOMC meeting on Wednesday. There is a lot of interest in this release as we have had two Fed Presidents say that they favored a larger increase we are also interested if there was any significant discussion over a "pause." We will also hear from Williams, Bostic and Mester.
3) Central Banks: The Reserve Bank of New Zealand is expected to hike another 50BPS and we get key speeches from ECB President LaGarde, the BofE and more. The bond market is focused on the overall tone of these Central Banks.
Treasury Sales:
02/21 2 year note
02/22 5 year note
02/23 7 year note
This morning markets are under heavy pressure. Volatility has started high but will likely moderate later in the day.
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: 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
NMLS: 250609 / DRE 01137630
Cell: 949-241-2527
10/10/2024
The headline September Consumer Price Index (CPI) was up 0.2% versus 0.1% on a M... view more
10/4/2024
In many ways it may have been a blessing that you were not an only child. In oth... view more
9/30/2024
These are the three areas that have the greatest ability to impact rates this we... view more