Trade fears push stocks and rates lower

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Published Date 3/22/2018

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: Lower

Mortgage rates are moving lower so far today. The MBS market improved by +12 bps yesterday. This may've been enough to improve mortgage rates or fees. The rates experienced moderate to high volatility yesterday.

Today's Rate Forecast: Lower

Jobs: Initial Weekly Jobless Claims came in at 229K vs est of 229K. The more closely watched 4-week moving average ticked up to 223,750 which is just off of its 45 year low.

Housing: The January FHFA House Price Index was double the market expectations with a 0.8% vs. 0.4% MOM reading. YOY, home prices have increased 7.3%.

Geopolitical: Commerce Secretary Wilbur Ross will testify before the House Ways and Means Committee and give them an update on NAFTA negotiations and Tariffs.

Congressional leaders reached an agreement Wednesday night on a spending bill that would fund the government until October. This still has to be voted on though.

China: The PBOC hiked their 7-Day repo rate from 2.50% to 2.55%, continuing the tradition of raising reverse repo rates in response to Fed rate hikes.

Japan: Nikkei Manufacturing PMI 53.2 vs est of 54.3

Germany: Markit Composite PMI 55.4 vs est of 57.0

Great Britain: The Bank of England voted 7-2 to leave rates unchanged. While they did not raise rates, the fact that their voted moved from 9-0 at their last meeting to two members voting to raise rates at this meeting could signal that they may be ready to start tightening soon.

Today's Potential Rate Volatility: Average

We're seeing some improvement in mortgage rates today. However, given the lack of significant mortgage rate moving data today, we'll likely stay in the very tight range that we've been in for weeks with relatively low 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

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