Published Date 2/15/2018
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 -43 bps yesterday. This was enough to worsen mortgage rates or fees. The rates experienced high volatility yesterday.
Inflation: Another day, another higher than expected inflationary report. The Producer Price Index readings for January were double than expected when looking Core PPI MOM (0.4% vs est of 0.2%). The YOY PPI Headline data hit 2.7% vs est of 2.5%.
Housing: The NAHB Sentiment Index remained at 72 which is an extremely high reading and was not impacted by rising mortgage rate expectations.
Jobs: Initial Weekly Jobless Claims matched expectations with a low 230K reading. The more closely watched 4-week moving average is still below 230K with a 228,500 reading.
Fed: Their February Business Outlook Survey jumped to an extremely high reading of 25.8 which handily beat out expectations of 21.1. New orders, at 24.5, are surging and unfilled orders, at 14.5, are piling up fast. Hiring is so far keeping up, at 25.2.
Japan: Industrial Production YOY 4.4% vs est of 3.9%
Mortgage rates moved higher yesterday with a good deal of volatility. Volatility should come down today after the inflation data. We don't have any other significant economic releases that are likely to move rates or increase volatility until next week.
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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