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.  Tracking these securities real-time is critical.  For more information about the rate market, contact me directly.  I’m among few mortgage professionals who have access to live trading screens during market hours.

Rates Currently Trending: Neutral

Mortgage rates are trending sideways so far today.  Last week the MBS market improved by +23bps.  This was enough to slightly improve mortgage rates or fees.  Mortgage rates remained fairly flat last week with low volatility. This Week's Rate Forecast: Neutral Three Things: The following three areas have the greatest ability to impact mortgage rates this week. 1) Tax Reform, 2) Across the Pond and 3) Domestic. 1) Tax Reform: While it has moved past the house, the market is not pricing in that it will pass in the Senate at this point. The revised bill has made it out of committee but cannot be voted on until they return from their holiday break. However, comments from Republican Senators that are "on the fence" will carry significant weight with the bond markets. 2) Across the Pond: There is plenty to rile the bond markets. Germany's PM Merkel is in trouble and so is Great Britain's PM May and the Brexit negotiations are a mess. The more this tragic soap opera plays out, the more uncertainty and instability there is in the markets. We also hear from ECB President Draghi and get key economic releases from Japan, Germany, Eurozone, and GB. 3) Domestic Flavor: Wednesday will be the biggest day of the week with the release of the Minutes from the last Fed meeting as well as important data points with Durable Goods Orders and Consumer Sentiment.

This Week's Potential Volatility: Average

We have an abbreviated week this week with Thanksgiving. Markets will be closed on Thursday and partially opened on Friday. We expect mortgage rates to be relatively flat for the week with low volatility. What's happening overseas could play a more significant than usual part in the movement of mortgage rates this week.

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.  

YOUR WEEKLY MORTGAGE RATE UPDATE IS PROVIDED BY: