
Mortgage Rates Improve Friday Despite Strong Economic Data
Mortgage rates saw some improvement today, following continued positive economic data. The market opened with a strong upward trend, but volatility ensued throughout the day.
Market Movements:
- Morning: MBS prices initially rose significantly, indicating a potential drop in rates. This was driven by positive economic data, including stronger-than-expected Housing Starts.
- Midday: The market experienced increased volatility, with MBS prices declining. This shift could lead to unfavorable repricing for some borrowers.
- Afternoon: Rates continued to fluctuate, with some improvement towards the end of the trading day.
Economic Data:
- Housing Starts: Surged 16% in December, exceeding expectations. However, the gains were primarily driven by multi-family units, with single-family starts showing only a modest increase.
- Industrial Production: Increased by 0.9% in December, significantly higher than the consensus forecast.
Market Outlook:
- Next Week: Investors will closely monitor statements from Federal Reserve officials for further guidance on monetary policy.
- Economic Reports: The upcoming week will be relatively light on economic data, with the release of Existing Home Sales on Friday.
- Market Closure: MBS markets will be closed on Monday in observance of Martin Luther King Jr. Day.
Current Rate Snapshot:
For a 30-year conventional fixed-rate mortgage on a $400,000 purchase with 20% down:
- Par Rate: 6.990% APR 7.190% (for a $400,000 purchase with 20% down, resulting in a monthly principal and interest payment of $2,127)
- Lowest Rate: 4.750% APR 5.920% (requires $36,389 in discount points to buy down the rate, resulting in a monthly principal and interest payment of $1,669)
Disclaimer:
This information is for general knowledge and informational purposes only and does not constitute financial, investment, or legal advice.