Three things that could impact rates this week

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Published Date 7/29/2024

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 moving sideways today. The MBS market improved by +26 bps last week. This may have been enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This week's Rate Forecast: Lower

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

1) The Fed: On Wednesday we will get the latest FOMC Interest Rate Decision and Policy Statement. The markets are not expecting a cut at this meeting but do expect them to set the stage for a September rate cut. Fed Chair Powell will give a live presser after the release of the FOMC Statement. This is NOT a meeting where they release their economic projections.

2) Jobs: We have a ton of job and wage related data all week culminating in Big Jobs Friday. Overall, the collective strength or weakness in this data will have a huge impact on rates. This week we have JOLTS, Employment Cost Index, ADP Payrolls, Unit Labor Costs, ISMs, Challenger Job Cuts, Initial Weekly Jobless Claims, Continuing Jobless Claims, Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings, Average Hourly Work Week, Labor Force Participation Rate, U6 Underemployment Rate.

3) Central Banks: We will have important interest rate decisions from 2 of the largest central banks in the world with the Bank of Japan and the Bank of England. The BofE has a potential to cut rates.

This week's Potential Rate Volatility: High

This morning markets are moving sideways with a minor negative lean. Volatility has started low with no big data releases on Monday. Volatility will increase to high 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.

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All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

J.C. Mier The Mortgage GOAT

Branch Manager/ Loan Officer

NMLS: 258527

Mortgage Goat LLC

130 N Preston rd #318, Prosper TX 75078

Company NMLS: 258527 /133739

Office: 469-628-4544

Cell: 469-628-4544

Email: jc@themortgagegoat.net

Web: http://www.themortgageGOAT.net