Published Date 6/6/2022

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 worsened by -57 bps last week. This was enough to increase mortgage rates or fees. The market experienced high volatility last week.

THIS WEEK’S RATE FORECAST: HIGHER
Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Inflation, 2) Central Banks and 3) Treasury Sales

1) Inflation: The focus this week will be on Friday’s Consumer Price Index (CPI). The headline number is expected to rise another 0.7% and Core another 0.5%. However, YOY the rates are expected to moderate below their 40 year peak highs due to the time period comparison vs. 12 months ago.

2) Central Banks: We expect another rate hike out of Australia but the focus will be on Thursday’s ECB Meeting as they struggle to address runaway inflation that they have been fueling with their zero interest rate policy for years.

3) Treasury Sales: We have seen blockbuster demand for our shorter term note auctions (2, 5 and 7 year notes). This week we have auctions for the 3 year note and 10 year note. Those are chapters in the same book as the prior note auctions. But Thursday’s 30 year bond auction is a different book completely. We have not seen any material reaction in rates to the note auctions but we have seen some real volatility after the 20 year and 30 year long bond auctions.

THIS WEEK’S POTENTIAL RATE VOLATILITY: HIGH
This morning markets are under pressure without any major news release. Volatility will spike this week on inflation and central bank news.

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.

Not all borrowers qualify for all programs, must meet underwriting guidelines and are subject to credit review and approval. This does not constitute a commitment to lend. JC Financial Solutions, Inc is an Equal Housing Lender. NMLS 365033, CABRE 01445232