Market Focus: Existing Home Sales, Manufacturing, and Trade War

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Published Date 11/21/2019

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: Neutral

Mortgage rates are moving sideways so far today. The MBS market improved by +8 bps yesterday. This wasn't enough to move mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Housing: October Existing Home Sales were in line with estimates (5.46M vs. est of 5.47M), it's a solid report.

Manufacturing: The November Philly Fed Manufacturing Survey was stronger than expected (10.4 vs. est of 7) and was double October's pace.

Jobs: Initial Weekly Jobless Claims were higher than expectations but matched the prior week's pace (227K vs. est of 219K). The more closely watched 4-week moving average ticked upward to 221K.

Trade War: China's chief negotiator and vice premier, Lie He said Wednesday night that he was "cautiously optimistic" about reaching a phase one trade deal with the US. Separately, the WSJ is reporting that China has invited the top US trade negotiation team for a new round of talks in Beijing.

Today's Potential Rate Volatility: Low

Rates and rate volatility continue to hinge on China trade negotiations. Look for rates to once again move sideways on relatively low volatility. However, anything substantive on China trade could quickly move rates and increase rate volatility.

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

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.

Wymac Capital, Inc.

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