Published Date 5/5/2022

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 today. The MBS market improved by +60 bps yesterday. This was enough to decrease mortgage rates or fees. The market experienced high volatility yesterday.

TODAY’S RATE FORECAST: HIGHER

Jobs: The April Challenger Grey Job Cuts showed a very low level of major corporations announcing job cuts with only 24,268. Initial Weekly Jobless Claims hit 200K after many weeks trending below that level. The more closely watched 4 week moving average moved upward to 188K. Continuing Claims were lower than expected (1.380M vs. est. of 1.400M).

Productivity: The 1st QTR Non Farm Productivity data went right into the toilet, crashing -7.5% vs. est. of -5.4% (4th QTR was a gain of 6.3%). This was due to Unit Labor Costs SURGING by 11.6%!

Central Banks: The Bank of England raised their key interest rate by 25 BPS to 1.00%. While this was widely expected, the vote was 6-3 with the 3 votes wanting a larger 50BPS hike. There forecasts point to inflation at over 10% by October.

TODAY’S POTENTIAL RATE VOLATILITY: HIGH

This morning markets are making up for some of the gains yesterday. Volatility is relatively high as markets recover from yesterday’s big movements.

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