Three things that could impact rates this week

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Published Date 2/27/2023

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 -39 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.

This week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates. 1) Manufacturing, 2) The Fed, 3) Overseas News

1) Manufacturing: We have a ton of manufacturing releases this week that include Durable Goods Orders, Chicago PMI, Richmond Fed, Dallas Fed, ISM Manufacturing, S&P Markit Flash PMIs, Non Farm Productivity and Unit Labor Costs. Overall, the manufacturing data has been extremely week over the past three months. Any strength is this round of data will be negative for pricing.

2) The Fed: The long bond market has clearly shifted to expecting more rate hikes and for them to remain in place for longer than what was priced in a month ago. A big part of that has been the constant drip of Fed speak which has all been on point with the same message. This week we will hear from Jefferson, Bostic and Barkin.

3) Overseas News: We have a ton of inflationary readings, job readings and manufacturing readings out of Europe and China to keep an eye on.

This week's Potential Rate Volatility: High

This morning markets are treading water. Volatility has started high as traders bounce off a firm support level.

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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