Consumer confidence hits 18-year high

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Published Date 9/25/2018

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: Neutral

Mortgage rates are moving sideways to slightly higher so far today. The MBS market worsened by -12 bps yesterday. This probably was enough to worsen mortgage rates or fees. The rates experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Fed: The FOMC started two days of policy meetings, and we 'll get their FOMC policy statement and rate decision at 2:00 pm ET on Wednesday.

Housing: The July 20 Metro-City Case-Shiller Home Price Index showed a YOY gain of 5.9% which was lower than estimates of 6.2%. But that was partly due to an upward revision to June from 6.3% to 6.4%. The FHFA (much larger data set) July MOM home price change showed a 0.2% increase, YOY it showed a 6.4% gain.

Consumer Confidence: The September reading was a block-busting 138.4 which is the highest reading since September 2000 and easily beat out forecasts of 131.7.

Treasury Dump: Today we have our 5-year note auction at 1:00.

Manufacturing: The regional Richmond Fed Manufacturing Index was much stronger than expected, 29 vs 22.

Japan: Leading Economic Index 103.9 vs set of 104.1

Germany: Wholesale Prices 0.3% vs est of 0.2%

Today's Potential Rate Volatility: Average

Mortgage rates ticked higher yesterday on moderate volatility. We're looking for the same today after a very robust manufacturing and consumer confidence numbers. However, we're not likely to see a significant move higher before the FOMC meeting tomorrow.

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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