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Weekly Mortgage Rate Update (April 3rd, 2017) Hagerstown, MD Real Estate

Rates at a Glance

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: Lower

Mortgage rates are moving lower so far today.  The MBS market improved by +29 bps last week. This was enough to improve rates or fees.   The market experienced low volatility last week.

This Week's Rate Forecast: Neutral

Three Things: These are the Three Things that have the greatest ability to impact mortgage rates this week: 1) Jobs 2) Geo-Political and 3) Fed

1) Jobs: It’s a new month which means we get our Big Jobs Friday. While the Non-Farm Payrolls (estimated to hit 185K) and the Unemployment Rate (estimated to remain at 4.7%) will get all of the headlines, it is the Year-Over-Year Average Hourly Wages that will get the most attention from MBS traders. Last time around it rose to 2.8% which is very high indeed. If that moves to 2.9% or even 3.0%, MBS will sell off even if there’s a downside miss to the NFP report.

2) Geo-Political: The biggest event to watch is Friday’s meeting with China’s president Xi Jinping in Florida. We’ll be watching for either more friction or softening between the U.S. and Chinese leaders in terms of trade and currency.

The bond market continues to price in risk for the French election as well and shifts in polling data will have an impact in mortgage rates.

3) Fed: Wednesday’s release of the Minutes from the last FOMC meeting where they raised rates will be very key and the speeches from the below Fed officials:

  • 04/03 William Dudley, Patrick Harker and Jeff Lacker
  • 04/04 Daniel Tarullo
  • 04/05 FOMC Minutes
  • 04/06 John Williams

This Week's Potential Volatility: Average

We don’t see anything that should move mortgage rates out of its very tight range today. For the week, it will take Average Hourly Earnings YOY to drop below 2.5% for you see a sustainable (multi-week) rally. But, if that moves from the current level of 2.8 to 2.9 or 3.0, then you will see the bond market begin to price in another Fed rate hike.

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:

Maximized Mortgage Solutions