Three things rate markets are focusing on today

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Published Date 5/21/2019

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 so far today. The MBS market worsened by -18 bps yesterday. This may've been enough to worsen rates or fees. The rates experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Housing: The April Existing Home Sales Report showed an annualized pace of 5.19 million units, which is just off of March's pace of 5.21M. The market was expecting a little better reading of 5.35M.

Fed: Today, we'll hear from Raphael Bostic, Charles Evans, and Eric Rosengren. Fed Chair Jerome Powell spoke late Monday evening, but his speech was not focused on Fed policy but discussed the potential dangers of rising corporate debt.

Trade War: Washington will allow Huawei to purchase American-made goods to maintain existing networks and provide software updates to existing Huawei handsets until Aug. 19. What happens next is unclear.

Eurozone: Consumer Confidence -6.5 vs est of -7.6

Brexit: PM Theresa May is looking to push through another Brexit vote.

Today's Potential Rate Volatility: Low

We're stuck in a tight technical area right now. We don't expect much movement for rates today, especially higher. Economically, there's nothing due out that will likely push rates around. However, geopolitically a lot is going on that could disrupt markets.

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

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