Three things that can impact rates this week

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Published Date 12/19/2022

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: Higher

Mortgage rates are moving higher today. The MBS market improved by +33 bps last week. This was enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This week's Rate Forecast: Higher

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Inflation, 2) The Consumer and 3) Central Banks.

1) Inflation: We get the Fed's key measure of inflation, Personal Consumption Expenditures (PCE) on Friday. Both headline PCE and Core (ex food and energy) are expected to show monthly increases. However, the YOY readings are expected to move lower due to the time frame comparison.

2) The Consumer will take center stage to see if they can weather higher rates, higher prices and an economic slowdown all at the same time. This week we get Consumer Confidence, Consumer Sentiment and Personal Incomes and Personal Spending.

3) Central Banks: This week we get interest decisions out of China and Japan.

Treasury Sales: We have a very important 20 year bond auction this week.

This week's Potential Rate Volatility: High

This morning markets are under some pressure as traders return from the weekend. Volatility has started slightly elevated but will spike later on Wednesday and Friday.

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.

Wymac Capital, Inc.

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