Published Date 5/13/2021
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 moving sideways so far today. The MBS market worsened by -66 bps yesterday. This caused rates or fees to move higher for the day. The rates experienced high volatility yesterday.
Inflation: The April Producer Price Index (PPI) was much hotter than expected. The headline YOY reading jumped by 6.2%! vs. est. of 5.9%. MOM, it was up double market expectations 0.6% vs. est. 0.3%. The Core (ex-food and energy) YOY PPI increased by 4.1% vs. est. of 3.7%. MOM, it was up 0.7% vs. est. of 0.4%. The headline PPI is the largest surge on record.
Jobs: Initial Weekly Jobless Claims came in at 473K vs. est. of 490K. The more closely watched 4-week moving average dropped to 534K. Continuing Claims matched forecasts with a reading of 3.665M, but 16.9 million Americans still receive a state and or federal check not to work.
Treasury Dump: We have a very important 30-year bond auction today at 1:00 pm ET.
Again today, the inflation numbers were higher than expected. However, after yesterday's jump in rates, markets are relatively calm. Rates markets are on hold until this afternoon's 30-year bond auction. If demand is less than expected, look for rate volatility to spike.
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
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