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Daily Mortgage Market Overview

INITIAL JOBLESS CLAIMS 244K VS 240K EXPECTED

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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: HIGHER

Mortgage rates are moving higher so far today.  The MBS market worsened by -24 bps yesterday. This was enough to worsen mortgage rates or fees.   The market experienced moderate volatility yesterday.

TODAY’S RATE FORECAST: HIGHER

Jobs: Initial Weekly Jobless Claims were close to market expectations (244K vs 242K). The more closely watched 4-week moving average fell to 243K. Continuing Jobless Claims dropped more than expected (from 2.028M down to 1.979M). Overall, a solid jobs report.

Philly Fed: Their April Manufacturing Survey continued to show gains but was at a slower pace than expected (22 vs est of 25).

Economic Indicators: The Conference Board’s March reading was double the market expectations (0.4% vs est of 0.2%).

Fed: Dallas Fed President Robert Kaplan (voting member) said that “Three rate increases this year…is still a good baseline. If the economy develops a little more slowly, then we can do less than that, and if the economy is a little stronger, we can do more than that.”

Fed Board Member Jerome Powell (voting member) expressed support for removing the qualitative standard applied by regulators to regular stress testing of banks.

Treasury: Secretary Steven Mnuchin will speak this afternoon, the bond market will be paying close attention to discussions over the valuation of the dollar, our approaching debt ceiling, and timeline for tax reform.

Eurozone: Their Core CPI matched market expectations at 1.5% (YOY).

TODAY’S POTENTIAL RATE VOLATILITY: AVERAGE

Mortgage rates are still very low, but we are seeing a bit of retracement. While we don’t expect any major moves in mortgage rates today, if we break above the new mortgage rate channel we could see significant 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

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.

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