MORTGAGE RATES FLAT AFTER WILD WEEK ___ TODAY'S MORTGAGE RATE…
Daily Mortgage Market Update
MORTGAGE RATES FLAT AHEAD OF FOMC ANNOUNCEMENT
Published Date 5/2/2017
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 worsened by -13 bps yesterday. This may’ve been enough to worsen mortgage rates or fees. The mortgage rate market experienced low volatility yesterday.
TODAY’S RATE FORECAST: NEUTRAL
Fed: The Federal Reserve Open Market Committee started two days of meetings today that will culminate with their interest rate decision and policy statement. This session does not have a live press conference with Janet Yellen nor the release of their “dot plot chart.” Overall, the FOMC Governors and District Presidents have been relatively “hawkish” as collectively they are telling the markets that two more rate hikes AND a tapering of MBS purchases in the 4th Qtr are what they expect unless the economy tanks between now and the end of the year. But the market is not buying any of it with a zero percent chance of a rate hike priced in for this week’s meeting and only a 50/50 shot of a hike at June’s meeting.
Jobs: Paychex said national hourly earnings for the month were $25.67, increasing 2.73 percent, or 68 cents, from last year. Weekly earnings were up 2.92 percent from last year.
China (number 2 economy): Their Caixin Manufacturing PMI showed growth at 50.3, but it was short of forecasts of 51.2.
Japan (number 3 economy): Their Markit Services PMI hit 52.2 which is a good reading.
Germany (number 4 economy): Markit Manufacturing PMI very strong at 58.2.
Great Britain (number 5 economy): Market Manufacturing PMI very strong at 57.3.
Eurozone: Their Unemployment Rate remained at last month’s level of 9.5%, and their Markit PMI was strong at 56.7.
Australia: Left their key interest at 1.5%.
TODAY’S POTENTIAL RATE VOLATILITY: AVERAGE
It looks like another day where mortgage rates will move sideways. Short of an unexpected geopolitical event, mortgage rates should be relatively unchanged until tomorrow’s FOMC announcement.
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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