Skip to main content

Glocker Group Realty Results
Main Office: 301-745-4400

You are here

Weekly Mortgage Rate Update (August 1st, 2016) 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: Neutral

Mortgage rates are trending slightly worse this morning.  Last week the MBS market improved by +57 bps.  This was enough to improve mortgage rates or  fees.  The MBS market was volatile last week.

This Week’s Rate Forecast: Neutral

Three Things: These three things have the biggest potential to impact long bonds this week – 1) Jobs data, 2) Central Banks and 3) Oil.

Jobs: We have a glut of labor data this week with ADP Private Payrolls, Challenger Job Cuts, Initial Weekly Jobless Claims, Personal Income and some internal data with our ISM releases. ButFriday’s Non-Farm Payrolls (NFP) will get the most attention. Anything above 170K and/or Average Hourly Wages YOY above 2.5% will keep the possibility of a September rate hike alive.

Central Banks: The market is expecting new stimulus measures out of Japan tomorrow morning and on Thursday, we get the Bank of England’s rate decision. The market has priced in a 100% chance of a rate decrease by the BofE, but they left rates alone in July.  This is a bit of a wild card.

Oil: Due to a big over supply and new rigs coming back online, WTI Oil “tanked” last week and is under pressure once again as it appears it might test the $40 level. The lower this goes, the better it is for mortgage rates.

This Week’s Potential Volatility: High

As noted above we’ll get a lot of jobs related data this week. This will play the biggest role in the direction of mortgage rates for the week. Weak jobs data is good for mortgage rates and strong jobs data is likely to put pressure on mortgage rates.

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