MIG Market Watch, March 16th, 2020

MIG Market Watch, March 16th, 2020

MIG Market Watch, March 16th, 2020

Mortgage bond prices finished the week sharply lower which put significant upward pressure on rates. We started the week on a positive note Monday morning but that quickly reversed later that day and rates increased every day for the remainder of the week. The coronavirus pandemic dominated headlines and resulted in some of the most volatile trading in over a decade. The DOW lost over 2000 points Monday morning, hit trading halt triggers multiple times during the week, and saw significant losses. The Fed announced $1.5T in spending to help market liquidity issues as a result of the global financial turmoil. Oil prices crashed. The data was generally tame but was overshadowed by fear and uncertainty. Core producer inflation fell 0.3% vs the expected 0.1% decline. Mortgage interest rates finished the week worse by almost 2 full discounts points.


Economic Indicator Release Date & Time Consensus Estimate Analysis
Retail Sales Tuesday, March 17,
8:30 am, et
Up 0.4% Important. A measure of consumer demand. A smaller than expected increase may lead to lower mortgage rates.
Industrial Production Tuesday, March 17,
9:15 am, et
Up 0.4% Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity Utilization Tuesday, March 17,
9:15 am, et
77% Important. A figure above 85% is viewed as inflationary. Weaker figure may lead to lower rates.
NAHB Housing Index Tuesday, March 17,
10:00 am, et
74 Moderately Important. A measure of single-family housing. Weakness may lead to lower mortgage rates.
Housing Starts Wednesday, March 18,
8:30 am, et
1.5M Important. A measure of housing sector strength. Weakness may lead to lower rates.
Fed Meeting Adjourns Wednesday, March 18,
2:15 pm, et
Rate cut expected Important. Most expect the Fed to change rates but are split on the size. Volatility may surround the meeting.
Weekly Jobless Claims Thursday, March 19,
8:30 am, et
205K Important. An indication of employment. Higher claims may result in lower rates.
Philadelphia Fed Survey Thursday, March 19,
10:00 am, et
28 Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.

It is very important to remember that US Treasuries and mortgage-backed securities MBSs, the bonds that dictate mortgage interest rates, are different. A US Treasury is backed by the US Federal Government while MBSs essentially are backed by property and borrowers. While both are debt instruments, they possess very different risk characteristics. A look back to the 2008 financial crisis shows how defaults on mortgages can snowball into chaos. Investors demand higher rates to lend money for mortgages because of this additional risk and others such as prepayment. This risk is why we recently saw the 10Y Treasury hit 0.38% while mortgages remained in the 3% to 4% range. It is true that MBSs and US Treasuries generally trade in the same direction. However, this isn’t a certainty and they often diverge significantly in terms of magnitude of change. Treasuries recently hit all-time lows and mortgage rates spiked higher. The recent financial volatility in stocks and bonds is a strong reminder that stocks do not always go up and mortgage rates do not always continue to push lower. Floating in these uncertain times is very risky.


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Mortgage Investors Group, based in Tennessee, offers residential financing in a number of states in the southeast, See MIG Service Areas. Terms and conditions to apply to home financing. We want to share with you the loan terms vary based on several characteristics and your financial profile. These include but are not limited to loan program, loan purpose, occupancy, credit history, credit score, assets, and other criteria per loan type. The repayment terms and interest rate may vary from time to time. The terms represented here are based on certain assumptions outlined below and/or noted on the loan outline page. Additional details concerning privacy, program disclosures, licensing specifics may be found at Legal Information.

MIG Loan Officers will help gather the information needed for an individual assessment to provide home financing which matches the loan characteristics with your home financing needs based on your financial profile, when you are ready to begin a full loan application. For estimates and general information before that step, the basis for which the mortgage financing information are as follows:

  • Rates are subject to change at any time.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Rate locks are available at current terms for 30 to 180 days based on program type, credit profile, property location, etc. which will affect the available rate and term.
  • Payments will vary based on program selection, current rates, property location, etc.
  • Not all programs are available in all states.
  • Some loan programs may not be available to first time home buyers.
  • Terms and conditions apply, which may include restrictions or limits per loan program.
  • Information is generally based on primary residence occupancy with no cash out when refinancing.
  • Unless otherwise stated, terms shown are estimates based in part on credit score of 700 or higher; owner occupancy, escrow account is established for taxes and insurance(s); debt-to-income ratio no higher than 43.0%; PMI applies to conventional loan programs over 80.0% LTV; VA,FHA & RD require insuring fees included in loan and/or payment; fixed rate, 30 year term.

An MIG Loan Officer is available to help with your financial details to determine which characteristics apply to your situation for a personalized look into which loan program best fits your home financing needs. Please use the Find a Loan Officer link or reach out to Mortgage Investors Group at 800-489-8910. Equal Housing Lender 1.2020