Published Date 9/9/2024
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.
Mortgage rates are moving sideways today. The MBS market improved by +62 bps last week. This was enough to decrease mortgage rates or fees. The market experienced high volatility last week.
These are the three areas that have the greatest ability to impact rates this week. 1) Inflation, 2) Central Banks and 3) Treasury Auction.
1) Inflation: We get one more round of heady inflation data before the September FOMC meeting with CPI and PPI. Headline CPI YOY is expected to move from 2.9% to 2.6% but Core CPI, is expected to remain at 3.2%. The bottom line is that the weaker that these data points are, the better it will be for rates and vice versa.
2) Central Banks: The European Central Bank (ECB) is expected to cut their main interest rate by 25 BPS but it will be their forward guidance that moves bonds.
3) Treasury Auction: We have a huge amount of debt that the marketplace must absorb this week with the bond market very much focused on Thursday's 30 Year Treasury Bond auction.
09/10 3 year notes $58B
09/11 10 year notes $39B
09/12 30 year bonds $22B
This morning markets took an initial dip but have climbed back up to neutral levels. Volatility has started at moderate levels but will increase later in the week.
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: TBWSAll 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.
First
Priority Home Loans is a DBA of Anchor Funding, Inc. NMLS #236419 &
1626581. California
Bureau of Real Estate,
Real
Estate Broker Number 01276087. Loans made or arranged pursuant
to the
California Department of Business Oversight. California Finance Lenders Law
license number 603 L293.
NMLS: 220937
First Priority Home Loans
891 Kuhn Drive #204, Chula Vista CA
Company NMLS: 236419
Office: 619-323-2066
Cell: 619-208-6499
Email: andrefunds4u@sbcglobal.net
NMLS: 220937
Cell: 619-208-6499
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