In our latest Mortgage Market Update, we’ll see how mortgage rates are trending and predict how they may change in the coming days.
But first, let’s review how mortgage rates move within the ever-changing market.
How Mortgage 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 trending sideways this morning. Last week the MBS market worsened by -4bps. This wasn’t enough to move rates higher last week. Mortgage rate volatility has remained very stable while stocks have shown a great deal of volatility.
This Week’s Rate Forecast: NEUTRAL
Three Things: These are the three areas that have the greatest ability to move rates this week: 1) Geopolitical, 2) Fed and 3) Inflation.
1) Geopolitical: The bond market will continue to give the majority of its focus on trade talks between China and the U.S. as well as “tweets” over the progress of those talks. Don’t forget about NAFTA as the deadline is fast approaching. The White House is also pushing to make some of the tax cuts permanent.
2) Fed: We will get the Minutes from the last FOMC meeting where they raised their key interest rate on Wednesday. Here is their schedule for this week:
04/10 – Robert Kaplan
04/11 – FOMC Minutes
04/12 – Neel Kashkari
04/13 – Eric Rosengren, James Bullard
3) Inflation: We get a couple of key reports this week with Wednesday’s CPI getting the most attention of bond traders. We will also get PPI and Import Prices this week.
Debt Dump: The Treasury will be dumping more debt onto the marketplace this week:
04/10 3 year note
04/11 10 year note
04/12 30 year bond
This Week’s Potential Volatility: AVERAGE
Mortgage rates are likely to trade in the same basic channel this week with relatively low volatility. Rates will primarily focus on tariff talks with China and comments from the People’s Bank of China.
What’s the 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. Interested in comparing mortgage options in for your next Texas home purchase or refinance? Speak with someone from my team to get a free rate quote and information on Texas home loans today.