Published Date 3/19/2019
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.
Mortgage rates are moving sideways so far today. The MBS market worsened by -4 bps yesterday. This wasn't enough to worsen rates. The rates experienced low volatility yesterday.
Factory Orders: January factory orders increased by 0.1%.
The Fed: Today starts 2 days of FOMC meetings, tomorrow we get their policy statement, interest rate decision, economic projections (dot plot chart) and a live press conference with Powell.
As is the usual situation ahead of the FOMC speculation is high with some thinking the Fed’s next move would be a rate cut, others still believing the Fed will increase rates again later this year. Jerome Powell will have his hands full tomorrow at his press conference. All eyes will be on signals from the Federal Reserve this week after the U.S. central bank’s dovish shift in recent months helped reignite a global equity rally on bets policy makers will act to support growth. Volatility has evaporated across assets as a result, but with expectations, the Fed will point to one more rate hike in 2019, it’s possible that markets could be over-pricing a Goldilocks scenario.
Brexit: The Brexit issue still unresolved but the EU is said to ready to offer Theresa May an extension of the March 29th deadline to try to carve out an acceptable agreement in the UL parliament; not a market mover in any case.
Germany: Economic Sentiment -3.6 vs est of -11.0
Eurozone: Economic Sentiment -2.5 vs est of -18.7
Great Britain: Unemployment Rate 3.9% vs est of 4.0%
The rate markets continue to move sideways today. Some market watchers are bracing for tomorrow's Fed policy statement and press conference. Rates have been unusually flat for so long that many think it is like a spring and we could move dramatically up or down if something unexpected occurs. While that is certainly possible, Fed meetings rarely cause anything other than very temporary volatility in the rate market.
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: TBWSAll 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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Mortgage Solutions Group, PLLC
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Cell: 512-733-6207
NMLS: 181064
Cell: 512-733-6207
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