MBS Change Throughout the Day 01-10-2025

Friday’s mortgage rates have seen a sharp increase, driven by stronger-than-expected job growth data. This morning, the market opened with a significant decline in mortgage-backed securities (MBS), indicating rising interest rates.

Key Market Movements:

  • Early Morning: MBS prices dropped by 38 basis points (bps) after the release of the jobs report.
  • Mid-Morning: The decline deepened to 41 bps, with the 30-year UMBS trading at 97.81, representing a 44 bp drop from the previous day.
  • Late Morning: MBS prices continued to fall, reaching a decline of 53 bps.

Job Market Strength:

The December jobs report revealed a significant increase of 256,000 jobs, far exceeding the anticipated 160,000. The unemployment rate also dipped to 4.1%, lower than the expected 4.2%. While wage growth moderated slightly, the strong job market data has fueled concerns about inflation and prompted the Federal Reserve to maintain a more hawkish monetary policy stance.

Impact on Rates:

The robust job market data has negatively impacted MBS prices, leading to higher mortgage rates for borrowers. This increase in borrowing costs could impact homebuyer affordability and potentially slow down home sales.

Current Rate Snapshot:

  • 30-Year Fixed Rate Mortgage:
    • Par Rate: 7.125% / APR 7.346% (for a $400,000 purchase with 20% down, resulting in a monthly principal and interest payment of $2,156)
    • Lowest Rate: 4.750% / APR 6.041% (requires $36,389 in discount points to buy down the rate, resulting in a monthly principal and interest payment of $1,669)

What This Means for Homebuyers:

Rising interest rates can significantly increase the cost of borrowing. Homebuyers should carefully consider their budget and timeline when making purchasing decisions.

Disclaimer: This information is for general knowledge and informational purposes only and does not constitute financial, investment, or legal advice.

Note: This is an example, and the actual rates may vary depending on several factors, including credit score, down payment, and loan-to-value ratio.