Three things that can move rates this week

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Published Date 7/26/2021

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 sideways to slightly better today. The MBS market improved by +26 bps last week. This may have been enough to lower mortgage rates or fees. The market experienced moderate volatility last week.

Today's Rate Forecast: Neutral

1) The Fed: Wednesday will see their latest Interest Rate Decision and Policy Statement followed by a live presser with Fed Chair Powell. This is not one of the meetings where the economic projections (dot plot charts) are released. The markets do not expect any action out of the FOMC, however bonds will be very sensitive to any discussion (or progression in discussions) around the timing of "tapering" their massive $120B of Treasuries and MBS each month.

2) Inflation: The Fed's preferred key measure of inflation, PCE, will hit on Friday. This is expected to once again be very high with the headline “PCE tipping above 4.0%.”

3) GDP: We’ll get our first look at the 2nd QTR GDP data on Thursday, which is expected to be in the 8.5% range.

Today's Potential Rate Volatility: Neutral

This week the market will be waiting for news out of the federal reserve on Wednesday and then reports on Friday. Volatility will likely increase in the latter half of the week.

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.

Millenium Home Mortgage, LLC NMLS # 51519 Licensed by the NJ Department of Banking and Insurance, CT Mortgage Banker 1st and 2nd Mortgages Licensed as MHM Home Mortgage, Licensed by the Pennsylvania Department of Banking. All interest rates, fees and programs are subject to change without notice. THIS ENTIRE SITE IS NOT INTENDED AS A SOLICITATION FOR MORTGAGE LOAN CUSTOMERS IN NEW YORK, PENNSYLVANIA, OR CONNECTICUT.