TODAY’S MORTGAGE RATE SUMMARY
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.
RATES CURRENTLY TRENDING: LOWER
Mortgage rates are moving sideways to slightly lower so far today. The MBS market improved by +17 bps yesterday. This caused rates or fees to mostly move sideways for the day. The rates experienced moderate volatility yesterday.
TODAY’S RATE FORECAST: NEUTRAL
Jobs: Initial Weekly Jobless Claims were higher than expected, coming in at 5.245M vs. est. of 5.105M. Continuing Claims jumped to 11.976M, but that was actually less than market expectations of 13.50M. This means that 22 million jobs have been lost in just 4-weeks. That wiped out ALL of the job gains that our economy picked up after our last recession.
Housing: March Housing Starts were 1.216M vs. est of 1.30M, which is a sizable pullback from Feb’s annual pace of 1.564M. Building Permits were inline with estimates, 1.353M vs. est. of 1.300M.
Manufacturing: The April Philly Fed Manufacturing Survey was dismal with a contraction of -56.6 vs. est. of -30.
Coronavirus: Here are this morning’s headlines
- U.S. Cases now at least 640K, deaths at least 31K
- Global cases now at least 2.01M, deaths at least 140K
- Singapore has reported another record daily increase of coronavirus cases with 447 new cases.
- Blackrock’s Larry Fink says businesses/economy should not reopen until employees are tested and pegs August as a probable timeline.
- Japan expands the state of emergency to cover the whole country.
- Russia’s streak of a new record and higher daily cases extend to 5th day.
- A hospital has confirmed that a dead patient has infected a medical worker with COVID-19 in Thailand
- President Trump is said to announce guidelines to open the economy on Thursday.
TODAY’S POTENTIAL RATE VOLATILITY: AVERAGE
Rates are ticking a bit lower on across the board weak data denoted above. While none of it is a surprise to the markets, it’s still helping rates a bit today. Look for rates to tick slightly lower on moderate volatility today.
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.
Source: TBWS
