Weekly Mortgage Rate Update (March 21st, 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: Neutral

Mortgage rates are trending higher this morning.  Last week the MBS market improved by +59 bps.  This was enough to improve mortgage rates or  fees.  The MBS market was volatile last week.

This Week’s Rate Forecast: Neutral

We have a light week for economic data, we do get GDP but its the third time that this 4th QTR data will be released. Three things: These are the three items that have the greatest potential to impact mortgage rates this week: 1) The collective tone of the multiple Talking Feds this week. 2) Durable Goods Orders, 3) Oil Prices.

Housing: We get Existing Home Sales, FHFA Home Price Index and New Home Sales. Neither generally has an impact on mortgage rates but will be interesting industry news.

Manufacturing: We get the Richmond Fed this week and it will be interesting to see if it follows the same “better than expected” trend as last week’s Empire MFG and the Philly Fed reports. But it will be Durable Goods Orders that will get the most attention. The last release saw a big beat to the upside and the market is expecting this reading to pull back into the negative but this report has been very volatile as of late.

GDP for the 4th QTR will be released (yet again) and it is expected to remain at 1.0%. This tired and old data at this point and not as big of a factor as the first release.

This Week’s Potential Volatility: High

There’s not a lot of data to move the mortgage rate needle until Thursday.  However, for the week overall we’re expecting moderate to high volatility.  Oil once again is likely to be a big factor for mortgage rates this week with the relatively low domestic economic data.

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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