Weekly Mortgage Rate Update (February 1st, 2016) Hagerstown, MD Real Estate
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
Sigma Research says that rates are trending slightly worse this morning. Last week the MBS market improved by +67bps. This was enough to improve rates or fees. In some cases by as much as .125% in rate. The market was extremely volatile last week.
Today’s Rate Forecast: Neutral
Jobs: We get a big helping of labor data that culminates with Friday’s Non Farm Payrolls. We have already seen this morning a Personal Income report that was higher than expected. We also get Unit Labor Costs, ADP Private Payrolls, Challenger Job Cuts and Average Hourly Earnings that we will be focusing on. This time around, this report is not likely going to change the Fed’s mind on the timing of their first rate hike of 2016, so this report will have less impact than the last one did but still very important this week.
Manufacturing: We get a large dose of data that starts out with today’s ISM Manufacturing. Will this surprise to the upside as last week’s Chicago PMI reading did? We also have Productivity and Factory Orders. Of course, more than 2/3 of our economic is Non-Manufacturing. And we get a reading on that too with the release of the ISM Services index on Wednesday.
China: Had their sixth consecutive month of contraction in their manufacturing sector as measured by their PMI. The January reading came in at 49.4 which was their lowest reading since August 2012.
Today’s Potential Rate Volatility: High
According to Sigma Research the risk for volatility is high today and this week. Employment numbers due out Friday and we could see increased volatility leading up to those numbers.
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.