Weekly Mortgage Rate Update (March 28th, 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

Sigma Research says that rates are trending slightly worse this morning.  Last week the MBS market improved by +65bps.  This was probably enough to improve rates or  fees.  The market was extremely volatile last week.

This Week’s Rate Forecast: Neutral

We have a very robust week for data and Fed speak culminating with our Big JobsFriday. Three Things: Here are the three most important items that have the greatest ability to impact your pricing. 1) Jobs data, 2) Janet Yellen and 3) Oil prices.

Jobs: We have a glut of jobs related data this week with ADP Private Payrolls, Challenger Job Cuts, Initial Claims, Non-Farm Payrolls, Unemployment Rate and Average Hourly wages plus we have a lot of wage data buried in other reports like PCE and ISM. With a 4 week moving average of below 260K in Initial Weekly Jobless Claims, it is difficult to see a big miss to the downside with Friday’sexpected Non-Farm Payroll data.  Mortgage rates will be paying special attention to that Average Hourly Wages data which is currently up +2.2% on a YOY basis. The MOM reading is expected to come in at +0.2% which would be a nice increase over last months -0.1%.

Fed: Its easy to forget that even though we have already had a Fed meeting this month, we are going to get another one the last week of April. Janet Yellen will speak before the Economic Club of New York and will get a lot of attention.

Oil: once again oil could play a role in mortgage rates. If it jumps this week, mortgage rates are likely to follow.

This Week’s Potential Volatility: High

We get a lot of economic news this week that can cause volatility in the market.  The most likely of which is the jobs numbers Friday.

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: