Lower Interst Rates push down this week! Strong increase in January job numbers🎉#timetobuy#dreamhome
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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: Lower
Mortgage rates are trending lower so far today. The MBS market improved by +28 BPS. This was been enough to improve mortgage rates or fees. Rates experienced high volatility.
Today's Rate Forecast: Lower
Jobs: The January Challenger Job Cuts report moved higher from 43.8K in December to 52.9K in January. Much of that was due to a natural decline in Retail Sales staff after the Christmas ramp up. The closure of Gymboree accounted for about half of the Retail Sales layoffs. Initial Weekly Jobless Claims were higher than expected (255K vs est of 215K). The more closely watched 4-week moving average moved up slightly to 220,250 which is a very low level. The slight increase in the jobless claims is attributed to the government shutdown.
Manufacturing: The January Chicago PMI was a big miss, coming in at only 56.7 vs est of 61.5. Now, any reading above 50.0 is good, and readings above 55 are great. But we are used to extremely robust readings in the 60s.
Housing: November New Home Sales were much stronger than expected 657K vs est of 560K
Personal Outlays: The PCE, Personal Income and Personal Spending reports were scheduled for today but have been postponed (just like yesterday's GDP) due to the government shutdown.
Trade War: The two sides continue two days of meetings. The president said that while the negotiations are going "very well," he said that "no final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long-standing and more difficult points."
Government Shutdown: The 3-week reopening continues to appear to be in jeopardy as the 17 lawmakers on the Homeland Security Committee are getting nowhere fast on border security, a key issue for reopening the government. There needs to be a bipartisan agreement on some form of border security, however, according to many reports, the Democrats on the committee will not agree to funding any type of border wall which is why most market participants are pricing in another shutdown in 2 weeks.
Brexit: Prime Minister Theresa May had a rare win on Tuesday with a modified amendment (primarily focusing on removing a backstop and replacing it with a promise to find a better solution in the future). However, they are now faced with the daunting task of the EU reopening negotiations.
China: Manufacturing PMI 49.5 vs est of 49.3/Non Manufacturing PMI 54.7 vs est of 53.9
Germany: Retail Sales -4.3% vs est of -0.6%/Unemployment Rate 5.0% vs est of 5.0%
Eurozone: GDP (Q4) 0.2% vs est of 0.2%/Unemployment Rate 7.9% vs est of 7.9%
Today's Potential Rate Volatility:Average
Mortgage rates finally broke out of its very tight channel that developed over the last few weeks. Rates are pushing lower on a good deal of volatility. Tomorrow is likely to be another exciting day with a flood of economic data.
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 only. You are advised to contact a financial expert before making any decisions.
