Three things that could impact rates this week

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Published Date 4/29/2024

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 getting a little support today. The MBS market worsened by -4 bps last week. This was not enough to increase mortgage rates or fees. The market experienced high 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) Jobs and 3) Manufacturing.

1) The Fed: We will get the Fed's latest Interest Rate Decision and Policy Statement on Wednesday. While the markets are not pricing in any rate change at this meeting, we will be keen to see if the tone of the FOMC statement and Fed Chair Powell's liver presser is more "hawkish." This is not one of their meetings where they release their Economic Projections.

2) Jobs: We will end the week with Big Jobs Friday but will have lots of job and wage related data all week long with Employment Cost Index, ADP, JOLTS, Challenger Job Cuts, Initial Weekly Jobless Claims, Unit Labor Costs, Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings.

3) Manufacturing: We will get the bellwether Chicago PMI and the national ISM Manufacturing and ISM Services this week. All will be closely watched.

This week's Potential Rate Volatility: High

This morning markets are getting some mild support. Volatility has started low but will pick up later in the week.

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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