CHM Blog

Neutral

Neutral

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 moving sideways today. The MBS market improved by +27 bps last week. This may have been enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This Week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Consumer, 2) Davos and 3) The Fed.

1) Consumer: After last week's block buster jump in Consumer Credit, will we see the same in Retail Sales? We will also get our first look at January's Consumer Sentiment Index.

2) Davos: The World Economic Forum (WEF) is in full swing in Davos. The bond market will be focusing on the barrage of different forecasts for 2024 and their expectations for growth/rates.

3) The Fed: We will get the Fed's Beige Book on Wednesday which is prepared in advance of the next FOMC meeting. We will also hear from Waller, Barr, Bowman, Williams, Bostic and Daly this week.

Treasury Auction: We have a 20 year Treasury bond auction on Wednesday.

This Week's Potential Volatility: High

This morning markets are mostly unchanged. Volatility has started at moderate levels but will increase later in the week.

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.

Richard Sardella has been actively managing and providing services in the mortgage industry for over 30 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.

All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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