Mortgage Rates Are Not Moving

Mortgage rates fell slightly below yesterday's opening, as the March's Consumer Price Index came in as expected, which still was a disappointment over the news from yesterday.  Overall, the rates are not moving in any direction.   Later, the Federal Open Market Committee (FOMC) concludes its monthly meeting, and investors will check the minutes from the Fed meeting this afternoon for clues about the extent and timing of future rate changes.

Where Are Mortgage Rates Going?                      

>>> Rates are holding

Lately when one looks at articles like this, it seems like a broken record, but the pattern for this week will continue to sound the same. Once again we have strong economic data (Core CPI YOY back above 2.0%) which would normally be negative for MBS.  However, this is being offset over uncertainty of trade wars as well as real war (Syria, Russia, etc) which is driving money into bonds as a safe haven.  The end result continues to be that MBS are "squeezed" in a very tight range. 

Today's FOM Minutes will be very key and may provide some volatility this afternoon.  But barring any missile launches or big shock in the Minutes, look for another day of slight pressure on pricing. 

Technically the bellwether 10-year Treasury is still holding slight positives although no trending in either direction. We are getting some safety moves to treasuries this morning on the increasing concerns the US is going to retaliate against Syria’s use of Chlorine gas on its citizens. Looks like some kind of military response based on Trump’s tweets and his canceling his trip to Peru. Meantime Russia saying it will shoot down any missiles launched by the US, Trump commented missiles “will be coming” to Syria, and warned he was willing to challenge Russia directly in launching a military strike against Syrian President Bashar al-Assad. “Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and ‘smart!’”  Do not doubt Trump will back down, he will not fall into the Obama trap of “drawing the red line” and then doing nothing.

Rate/Float Recommendation           

>>> Little reason to float, unless you have a crystal ball

Rates are fairly stable right now, but tomorrow do bring some important pieces of data. Normally, given the above inflation numbers, mortgage rates would be pushing rather significantly higher. That is not the case so far today. The main reason is that the market is concerned with the China trade issues and the potential of the US entering the conflict in Syria.  These two geopolitical issues is pushing money into safety plays like treasuries.  There is always a possibility we could see mortgage rate volatility given the increased geopolitical issues.

Again, as this has been repeated many times, this type of news is still good for anyone still looking to buy a home or refinance their current mortgage. Inventory is low, and there are a number of buyers who want to move and are fearful of rates.  Rates are on track to move higher as the year unfolds so most borrowers will be better off locking in a rate soon.  If you have any further questions, give us a call or visit our website at Call TheMoney Man.