Weekly Mortgage Rate Update (July 13th, 2015) 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: Higher

Sigma Research said that rates are trending worse this morning.  Last week the MBS market worsened by -4 bps.  This was probably not enough to affect rates or fees. However, the market was extremely volatile last week and is down significantly this morning.

This Week’s Rate Forecast: Neutral

According to Sigma Research Greece is being pulled back from the economic and financial edge. Over the weekend EU leaders agreed to give Greece €86B ($96B) for new bailout loans. The carrot depends on Greece accepting an increase in austerity cuts that last week Greek voters voted against. The deal is characterized as a total surrender to Greek creditors. “The deal is hard,” Mr. Tsipras said after the summit, warning that the measures required by creditors will send the country’s economy further into recession.

With the move away from the cliff in the EU, time to re-focus on US domestic data. The Fed will release its Beige Book, Fed staff’s report from the 12 Fed districts. June housing starts and permits. This is also earnings season, markets keen to see Q2 data and the potential to hold profits after Q1 actually was a plus for most public companies.

This Week’s Potential Volatility: High

According to Sigma Research the risk for volatility is high today and this week.  With the Greece deal theoretically out of the headlines for now the markets will focus on domestic data and there’s a lot this week to move the market.

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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