1-y1-300x199In this week’s mortgage market update we take a look at housing starts and how the figures have improved in the last month. We’ll also see where mortgage rates are likely headed and how they may move based on economic data.

Mortgage Rates At-A-Glance

  • Currently Trending: Neutral
  • 7-Day Forecast: Neutral
  • Volatility: Fairly High

National Housing Starts Rise in March

A recent report from the Commerce Department shows that U.S. housing starts increased 2.8 percent in March to a seasonally adjusted annual rate of 946,000. This is great news, as it offers solid evidence that the new home construction industry is picking up steam. However, it should be noted that this is still a bit lower than last year’s figure, indicating that there is definitely still room for improvement. Still, the numbers are finally starting to move in the right direction, which is promising.

In addition to new housing starts in March, February’s data has been revised to show even better figures than originally reported. February actually saw a 1.9 percent jump in housing starts, rather than the 0.2 percent fall that was previously reported.

After an especially brutal winter, these improvements are more than welcome. Home building stalled in December and January, due to unusually harsh winter weather that swept through most of the country. Activity was also tempered by shortages of available lots and skilled labor. Rising material costs also put a burden on home building growth. Nevertheless, the latest data reveals a renewed level of activity just in time for the spring season. Groundbreaking for single-family homes, which represent the largest segment of the market, surged ahead 6.0 percent to a 635,000-unit pace in March. Starts for multi-family homes, which is a much more volatile segment, dropped 3.1 percent to a 311,000-unit pace.

Tracking MBS Pricing and how it Affects Mortgage Rates

Mortgage rates are anything but stationary. Because lenders base their rates largely on the price movement of Mortgage-Backed Securities (MBS), which are traded all day on the bond market, the interest rates you see on mortgage lenders’ websites are likely to move up or down from day to day – sometimes even throughout the same day. Political and economic events can have significant effects on MBS pricing, which is why mortgage lenders pay close attention to national and global news events. Many lenders also utilize real-time tracking for MBS pricing. The Decker Group is one such lending organization that has access to this type of MBS tracking, which makes us able to keep up with the latest developments and changes during market hours.

Since rates are currently staying neutral, they are likely to remain stable through the week. However, the situation in the Ukraine and other economic data scheduled for release this week could move rates up or down. It’s important to talk with your mortgage lender about locking in a rate or floating – both of which offer certain benefits and drawbacks.

If you’re a homeowner or home buyer in Texas, contact The Decker Group today for more information. You’ll get connected with an experienced loan professional who can offer you a free rate quote and a no obligation mortgage consultation.