Published Date 12/4/2023
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 under heavy pressure today. The MBS market improved by +97 bps last week. This may have been enough to decrease mortgage rates or fees. The market experienced high volatility last week.
Three Things: These are the three areas that can have the most impact rates this week. 1) Jobs. 2) Central Banks and 3) Services.
1) Jobs: We get a ton of job and wage related data this week culminating in Big Jobs Friday. We have ISM Services Employment Index, JOLTS, ADP, Unit Labor Costs, Challenger Job Cuts, Initial Weekly Jobless Claims, Non Farm Payrolls, Average Hourly Earnings, Unemployment Rate, Average Weekly Hours, U6 Under Employment and Labor Force Participation Rate.
2) Central Banks: The Bank of Canada is expected to keep their key interest rate at 5.00% however the markets will be very keen to examine their language hinting on a rate cut. Speaking of rate cuts, the bond market is balancing expectations of a rate cut by the ECB next week and will continue to try to front run the FOMC's decision next week.
3) Services: We got a mixed bag with Manufacturing last week with a huge beat in Chicago PMI but a very tame ISM. This week the focus will be on the services side which accounts for 2/3 of our economic engine and has almost single-handily kept our economy afloat. ISM Non Manufacturing PMI will hit on Tuesday.
This morning markets have seen some big pull back from last week's gains. Volatility has started high and will likely remain that way with the deluge of jobs data this week.
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: 3304
Sage Wholesale
200 SANDPOINTE AVE, 8th Floor, SANTA ANA CA 92707-5751
Company NMLS: 3304
Office: 949-681-5253
Cell: 818-793-6650
Email: Info@SageTPO.com
NMLS: 3304
Cell: 818-793-6650
4/26/2024
It’s the nightmare we think only happens in the movies. “We have to pack,” says ... view more
4/26/2024
Yesterday the release of the advance Q1 GDP sent rates up and MBS prices lower. ... view more
4/25/2024
The preliminary 1st QTR GDP was much lighter than expected, showing a QoQ increa... view more
4/24/2024
Ever notice how some of the most elegant clothing and beautiful home decor have ... view more
4/22/2024
Click the link; buy a sofa. Click on another; buy a pergola for your backyard...... view more
4/22/2024
These are the three areas that have the greatest ability to impact rates this we... view more
4/19/2024
Cosmetically all the hard work had already been done for them. What they didn’t ... view more
4/19/2024
Israel retaliated against Iran last night. Tit for tat may have run its course..... view more
4/18/2024
Initial Weekly Jobless Claims remained very low at 212K versus estimates of 215K... view more
4/17/2024
You’ve seen them. Sometimes there is a grand entry with a sentry-like gate, a sh... view more