Weekly Mortgage Rate Update (March 7th, 2016) Hagerstown, MD Real Estate
How Rates Move:
Conventional overnment (FHA and VA) lenders set their rates based on the pricing of Mortgageand G-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: Higher
Sigma Research says that rates are trending slightly worse this morning. Last week the MBS market worsened by -33 bps. This was enough to affect mortgage rates or fees. The market was extremely volatile last week
This Week’s Rate Forecast: Higher
We have a very light week in terms of the number and type of domestic economic data, the following three items (listed in order of importance) have the greatest potential to impact your back end pricing: 1) ECB Meeting and Policy Statement (Thursday), 2) WTI Oil prices (all week) and 3) 30 year Treasury bond auction.
The Talking Fed: We enter our “blackout” period this week as Fed officials are not permitted to speak a week before the FOMC meeting. But we do have Vice Chair Stanley Fischer today. Treasury Auction this week: 03/08 – 3 year note, 03/09 – 10 year note and 03/10 – 30 year bond.
Fed: We enter our “blackout” period this week as Fed officials are not permitted to speak a week before the FOMC meeting. But we do have Vice Chair Stanley Fischer today.
ECB: The biggest event of the week with the potential to impact all financial markets is Thursday’sEuropean Central Bank (ECB) meeting. Their president, Mario Draghi has been stumping for several month’s now, eluding to more stimulus by the ECB. But he has manipulated the markets for a long time promising his “bazooka” approach prior to many of the ECB policy meetings only to do nothing. Will this meeting see any “real” and new stimulus? If so…in what form? Simple rate cut will do nothing longer term. This meeting is a real “wild card” and could really give us some volatility this week.
This Week’s Potential Volatility: Average
According to Sigma Research there’s very little economic data this week and what there is isn’t what we would consider first tier news. Most of this week will draw focus from global news; the awaited ECB meeting on Thursday at which it is widely thought Mario Draghi will announce more interest rate cuts (more negative 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.
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