U.S. Weekly Jobless Claims Rise Less Than Expected

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Published Date 8/24/2017

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 improved by +19 bps yesterday. This may've been enough to improve mortgage rates or fees. The market experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Housing: July Existing Home Sales hit 5.44 million units on an annualized basis vs est of 5.56M. The key pieces of data are that the median sales price has risen to $258,300 and inventories dropped to a 4.2 month supply.

Jobs: Initial Weekly Jobless claims came in at 234K vs est of 238K. The more closely watched 4-week moving average dropped to 237,750 which is very low.

Fed: Today started the Kansas City Fed's Jackson Hole, WY Economic Symposium. For the next several days we will hear speeches from many Fed presidents, top economists, key global Central Bankers, and traders. Friday will feature Yellen and Draghi and could have a huge impact on pricing.

Kansas City Fed President Esther George (nonvoting member) said that the Fed's mandate is "price stability" and not really inflation. She stated that there is certainly price stability as well as steady growth and that is supportive of another rate hike this year.

Japan (number 3): Their Leading Economic Indicators in June increased from 104.7 in May to 105.9 in June.

Great Britain (number 5): 2nd QTR GDP (second release) was unchanged at 1.7%unchanged at 1.7%.

Today's Potential Rate Volatility: Average

Mortgage rates are flat for the week and we expect more of the same today with very little volatility. Tomorrow's volatility could spike when Yellen and Draghi speak.

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

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