Rate markets a bit sleepy ahead of Powell's comments tomorrow

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Published Date 11/27/2018

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 so far today. The MBS market improved by +3 bps yesterday. This wasn't enough to improve rates. The rates experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Housing: September Case-Shiller 20 city Metro Home Price Index showed a YOY home price gain of 5.1% vs est of 5.3%. The FHFA Home Price Index for September showed a MOM gain of 0.2% vs est of 0.4%.

Consumer Confidence: The November reading moved lower than October's blistering pace of 137.9 but is still historically high at 135.7.

Fed: Vice Chair Richard Clarida said that the Fed want's the smallest balance sheet possible but thinks it will remain above the pre-crisis size of less than $1 trillion. He also said that there is still room to hike rates before hitting their target "neutral" rate but that we are not far from it.

Treasury Dump: Today we have our 5 year note auction.

Today's Potential Rate Volatility: Low

Mortgage rates are likely to continue to move sideways today with low volatility. Rate markets are on hold until at least tomorrow at 11:30 am, Jerome Powell will speak at the Economics Club of New York.

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.