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HOME PRICES SHOWED THE HIGHEST GROWTH IN OVER 15-YEARS

TODAY’S MORTGAGE RATE SUMMARY

HOW RATES MOVE:

Conventional and Government (FHA and VA) lenders set their rates based on Mortgage-Backed Securities (MBS) pricing, 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 various 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 slightly lower so far today.  The MBS market improved by +13 bps yesterday. This caused rates or fees to mostly move sideways for the day.  Rate markets are trailing slightly lower the last couple of weeks. The rates experienced moderate volatility yesterday.

TODAY’S RATE FORECAST: NEUTRAL

Housing: March YOY Case Shiller 20 metro city Home Price Index increased by 13.3% vs. an estimate of 11.7%. The FHFA Housing Price Index for March showed a MOM gain of 1.4% vs. an estimate of 0.9%. April New Home Sales were lighter than expected (863K vs. est. of 917K).

Manufacturing: The May Richmond Fed Manufacturing Index was 18 vs. an estimate of 15.

Consumer Confidence: The May Conference Board survey came in at 117.2 vs. an estimate of 119.5.

Treasury Dump: We kick off three days of dumping our debt into the marketplace with our shorter-term 2-year note auction today at 1:00 pm ET.

TODAY’S POTENTIAL RATE VOLATILITY: AVERAGE

Rate markets continue to drift lower on low to moderate volatility. There’s nothing in the news that’s pushing rates lower; it’s more of a technical move. Also helping rates is the continued belief that the Fed will continue its easy policy regardless of the signs of inflation.

BOTTOM LINE:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact Ken at Mortgage-Boss to discuss it with him.

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