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Weekly Mortgage Rate Update (June 20th, 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: Higher

Mortgage rates are trending higher this morning.  Last week the MBS market improved by +17 bps.  This may’ve been enough to improve mortgage rates or  fees.  The MBS market was fairly calm last week.

This Week’s Rate Forecast: Higher

The following are the three events that bond traders will be paying the most attention to this week 1) Brexit Vote, 2) Yellen  and 3) Durable Goods Orders.

1) Brexit Vote: The British will vote and when our market opens Thursday morning, we should know if they are going to stay in the European Trade Union or not. If not, they will have 2 years to iron out the individual trade agreements which each European country and MBS will sell off as the bond markets have a lot of money parked in bonds ahead of this event.

2) Yellen: She will testify before the House and Senate this week. While we don’t really expect anything new from her since we just had a big Fed meeting last week, her responses to their questions can move bond markets. Thursday will be more closely watched than Wednesday. Normally, its just a carbon copy of the prior day’s remarks. But we should know the outcome of the Brexit Vote Thursday morning and this could greatly influence Janet Yellen’s remarks that day.

3) Durable Goods: This will be our first major domestic economic report after the Brexit vote and will be closely watched to see how our manufacturing sector is doing.

This Week’s Potential Volatility: High

Mortgage rates will be fairly volatile leading up to the Brexit vote on Thursday. Regardless of the outcome of the vote, we’ll see be swings in mortgage ratesThursday. Durable Goods Orders will give us more insight into the health of the economy and will have an impact on the direction of mortgage rates in the short term.

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