Friday saw a continuation of the positive trend in mortgage markets, with rates improving from the close of last week. The market opened with encouraging signs, and while volatility was present throughout the day, rates ultimately posted solid gains.

Market Movements:

• Morning: MBS (Mortgage-Backed Securities) saw significant gains, initially up +19 basis points (bps) after weaker-than-expected Retail Sales data. This momentum continued, reaching +25bps by 10:00 AM.
• Midday: Volatility increased, with MBS trading up +38bps around 11:11 AM.
• Afternoon: Rates stabilized, with MBS closing around +25bps.
• Weekly Performance: For the week, MBS rose approximately 6bps.

Market Drivers:

• Weak Retail Sales: The primary driver of the day’s gains was the significantly weaker-than-expected January Retail Sales report. This data suggests a potential slowdown in consumer spending, which could influence the Federal Reserve’s monetary policy decisions.
• Fed Meeting Minutes: Next week, investors will closely watch the release of the detailed minutes from the January 29th Fed meeting for further insights into the central bank’s plans for future interest rate hikes.

Economic Data:

• Upcoming Releases: The upcoming week will feature key housing market data, including Housing Starts on Wednesday and Existing Home Sales on Friday.
• Market Closure: Mortgage markets will be closed on Monday in observance of Presidents’ Day.

Current Mortgage Rates:

For a 30-year conventional fixed-rate mortgage:

• Par Rate: 6.750% APR 6.964% (on a $400,000 purchase with 20% down, loan of $320,000)
• Lowest Rate: 4.500% APR 5.667% (requires $33,539 in discount points)

Disclaimer:

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