Pending home sales jump in February

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Published Date 3/28/2018

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 moving sideways to slightly lower so far today. The MBS market improved by +18 bps yesterday. This was enough to improve mortgage rates or fees. The rates experienced moderate volatility yesterday.

Today's Rate Forecast: Lower

Housing: February Pending Home Sales 3.1% vs est of 2.1% MOM. Weekly Mortgage Applications improved by 4.8% led by a big 7.8% jump in Refinance Applications. Purchase applications continued their solid trend with a 3.0% improvement.

Gross Domestic Product: We got our 3rd look at the 4th QTR GDP and its second and final revision. It was revised upward to 2.9% from 2.5%. The market was expecting something in the 2.6% to 2.7% range, so this was stronger than expected. PCE QoQ remained at 1.9%. But tomorrow's YOY PCE is the one that the Fed uses for their target rate.

Trade Imbalance: The trade deficit grew to $-75.35B in Feb, the market was expecting $-72.50B.

Treasury Auction: Today we have our 7-year note at 1EST.

Fed: Today we hear from Raphael Bostic (again..3rd time this week).

Germany: Consumer Confidence Survey 10.9 vs est of 10.7

Today's Potential Rate Volatility: Average

Mortgage rates entered into another lower channel yesterday. This isn't a substantial change yet. We expect mortgage rates to continue to trade in this very tight range with relatively low volatility heading into the long weekend. Of course, the one thing that can change the volatility outlook is an unexpected geopolitical event.

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.

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