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.