Home Mortgage Alliance Corporation (HMAC)

Existing home sales continue to impress, bouncing to a 14-year high

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Published Date 9/22/2020

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 improved by +19 bps yesterday. This caused rates or fees to potentially move slightly lower for the day. The rates experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Housing: August Existing Home Sales hit 6.00M vs. est. of 6.00M, which was a 2.4% increase over July's pace. It was the highest pace since 2006, but in 2006 there was almost twice as much inventory available.

Manufacturing: The September Richmond Fed Manufacturing Index came in at 21 vs. est. of 18.

The Fed: We will hear from Fed Chair Powell today at 10:30 am ET.

Treasury Dump: We kick off three days of dumping our debt into the marketplace with our shorter-term 2-year note at 1:00 pm ET.

Coronavirus:

The U.K goes on lockdown for the whole of the U.K., set it for 6 months, and makes it legal (not a guideline or suggestion) with penalties to businesses that do not adhere to the polices.
The U.S. sees over 52K new cases, which is the most in 5 weeks.
Europe sees curfews

Today's Potential Rate Volatility: Average

We continue to see intraday rate volatility spike a bit. However, when the dust settles, rates remain mostly unchanged. There's nothing on the news wires today that will likely significantly move rates for the day.

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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