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Weekly Mortgage Market Overview

THREE THINGS THAT CAN IMPACT MORTGAGE RATES THIS WEEK

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THIS WEEK’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 +56 bps last week. This was enough to improve mortgage rates or fees.   The market experienced moderate volatility last week.

THIS WEEK’S RATE FORECAST: NEUTRAL

Three Things: These three areas have the greatest ability to impact mortgage rates this week. 1) Geopolitical Fear, 2) The Fed and 3) Domestic.

1) Geopolitical Fear: This will be the primary factor in all pricing this week. This week will be dominated by the first round of the French presidential election on Sunday. With the number of undecided voters remaining high, four candidates look set to fight for the two places in the second round on 7 May. The polling data leading up to Sunday will have a large impact on mortgage rates. China, North Korea, Russia, Syria, Iran, and Afghanistan will continue to drive fear in the bond market.

2) The Fed: They “data dependent” Fed continues to tell the market that we should expect two more hikes this year and be prepared for few Treasury and MBS purchases by year end. But the markets are not listening as they currently barely even have one more rate hikes priced in.

  • 04/17 Vice Chair Stanley Fischer
  • 04/18 Esther George
  • 04/19 Fed’s Beige Book and Eric Rosengren
  • 04/20 Jerome Powell
  • 04/21 Neel Kashkari

3) Domestic Flavor: Our economic calendar is very light this week without a single report that has the gravitas to significantly move mortgage rates. We do get a large dose of Housing news with Home Builder’s Sentiment, Housing Starts and Building Permits, Weekly Mortgage Applications and Existing Home Sales.

THIS WEEK’S POTENTIAL VOLATILITY: AVERAGE

There isn’t any domestic economic news due out this week that will likely move mortgage rates. The mortgage rate market will focus on geopolitical events.  The more unstable the situations appear to be overseas, the more likely mortgage rates will continue to remain low and potentially move lower.

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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