Jobless claims higher than expected

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Published Date 12/21/2017

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: Neutral

Mortgage rates are moving sideways so far today. The MBS market worsened by -19 bps yesterday. This may've been enough to worsen mortgage rates or fees. The market experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Housing: The FHFA October House Price Index showed a 0.5% MOM increase and a 6.6% increase in the YOY reading.

Jobs: Initial Weekly Jobless Claims were higher than expected (245K vs est of 236K). The more closely watched 4-week moving average is still below 240K (236K).

Manufacturing: The regional Philly Fed Manufacturing/Business Outlook was much higher than expected (26.2 vs est of 21.0) and a large improvement over November's 22.7 reading. New Orders shot up 8 points which is very strong.

GDP: The 3rd QTR GDP number was revised from 3.3% down to 3.2%. Its the third time that we have seen this data and has it been revised higher and then lower. Regardless it remains above 3.0% which is a strong reading and is the highest reading since Q1 2015.

Leading Economic Indicators: Building on October's monster 1.2% reading, LEI gained another 0.4% in November, pretty solid.

Japan: The Bank of Japan kept their key interest rate at -0.1%.

Canada: Retail Sales were stronger than expected (1.5% vs est of 0.3%) and inflation was higher than expected with YOY CPI at 2.1%.

Today's Potential Rate Volatility: Average

Mortgage rates are likely to trend sideways with relatively low volatility. The potential government shutdown is helping to keep a lid on mortgage rates.

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.