January 14th, 2021 10:41 AM by Richard Sardella MLO.100007700/NMLS 233568
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 so far today. The MBS market worsened by -1 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 shot up to 965K vs. est. of 795K. The more closely watched 4-week moving average increased to 834K. Continuing Claims were also higher than expectations, 5.271M vs. est. of 5.061M.
Genco Olive Oil: Import Prices increase more than expected, 0.9% vs. est. of 0.6%. Export Prices were more than double expectations, 1.0% vs. est. of 0.5%.
The Fed: We will hear from Fed Chair Powell at 12:30 pm ET today. We will also hear from Rosengren, Bostic, and Kaplan.
Stimulus: President-elect Joe Biden is expected this evening to unveil a stimulus plan that will include a boost to the recent $600 direct payments, an extension of increased unemployment insurance, and support for state and local governments. The stimulus could be as big as $2 trillion.
Today's Potential Rate Volatility: Average
Rate markets calming down after moving higher on elevated volatility. The weekly jobless claims came in high today and are helping to keep rates suppressed. Rate markets will be paying attention to any leaks about the stimulus plan being revealed this evening.
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 27 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.
MLO of record MLO.100007700 / NMLS#233568 / CHM NMLS#127716.