Published Date 3/26/2020
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 slightly lower at the moment. The MBS market worsened by -9 bps yesterday. This may've caused rates or fees to move sideways for the day. We saw extreme rate volatility again yesterday.
Jobs: Initial Weekly Jobless Claims jumped by 3.283 million vs. estimates in the 1 to 4 million range. It's the biggest jump on record. The BLS said that nearly every state reported the COVID-19 as the reason.
GDP: We got our third look at the 4th QTR GDP, and it remained at 2.1%. Of course, this data is now too old to have any bearing on current market conditions.
Central Bank: The Bank of England kept its key interest rate at 0.1%. They had previously cut that from 0.75% at an emergency meeting. They took no action at this regularly scheduled meeting. The European Central Bank started purchasing bonds under its new emergency QE facility, and so far, it is helping both Spanish and Italian bond yields.
Stimulus? After the big "wiff" yesterday, the Senate has passed a $2T bill by a vote of 96-0, the House says it will vote on it on Friday.
Coronavirus: The following are the key headlines that are grabbing the attention of bond traders this morning:
Once again today, we're seeing extreme market and rate volatility. While the jobless levels were at record-breaking levels and are tragic, to say the least, the markets were not caught by surprise. Look for rate markets to continue to show severe volatility while they digest the unemployment news, stimulus details, and coronavirus developments.
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.
Wymac Capital, Inc.
NMLS: NMLS: 290837 | Broker CalRE: 01150730
Wymac Capital, Inc.
346 Rheem Blvd #107, Moraga CA 94556
Company NMLS: 18766
Office: 925-937-4300
Email: russellm@wymac.com
Web: https://wymac.com
NMLS: NMLS: 290837 | Broker CalRE: 01150730
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