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.

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Mortgage Advisor

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Finance of America Mortgage

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