Three things that could impact rates this week

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Published Date 3/4/2024

Today's Mortgage Rate Summary

How Rates Move:

Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage-Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up.

Rates Currently Trending: Neutral

Mortgage rates are under pressure today. The MBS market improved by +31 bps last week. This may have been enough to decrease mortgage rates or fees. The market experienced moderate volatility last week.

This week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) The Fed, 2) Central Banks and 3) Jobs.

1) The Fed: We get one last week of Feds prior to next week's media blackout period leading into the next FOMC Meeting. The main focus this week will be Fed Chair Powell's Semi-annual testimony on Wednesday and Thursday.

03/05 Barr

03/06 Daly, Kashkari, Powell Testimony and the Fed's Beige Book

03/07 Mester, Powell Testimony

2) Central Banks: We get key interest rate decisions out of the Bank of Canada and the European Central Bank.

3) Jobs: We will have Big Jobs Friday this week along with a ton of job and wage related data all week long. ADP Payrolls, ISM Employment Index, JOLTS, Challenger Job Cuts, Initial Weekly Jobless Claims, Unit Labor Costs, Non Farm Payrolls, Average Hourly Earnings, Unemployment Rate, U6 Underemployment Rate, Laborforce Participation Rate, Average Weekly Hours.

This week's Potential Rate Volatility: Neutral

This morning markets are under mild pressure. Volatility has started low but will increase as the week goes on.

Bottom Line:

If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.

Source: TBWS

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