Three things that could impact rates this week

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Published Date 8/5/2024

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 due to the ISM data. The MBS market improved by +86 bps last week. This was 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) Geopolitical, 2) Treasury Auction and 3) Domestic News.

1) Geopolitical: The U.S. Bond market has certainly benefitted from the "safety" trade recently and this week the main momentum will come from Iran/Israel.

2) Treasury Auction: We have a massive amount of debt that we will be dumping into the marketplace which includes the 10 Year Note and most importantly, the 30 Year Bond auction:

08/06 3 year note.

08/07 10 year note.

08/08 30 year bond.

3) Domestic News: The most important economic release of the week is today's 10 am ET release of the ISM Services PMI which had alarmingly dipped below 50 the last time around. This time it is expected to climb back above 50. It was reported at 53.8, beating expectations. Wednesday afternoon's Consumer Credit will get a lot of attention from bond traders as well.

This week's Potential Rate Volatility: High

This morning markets are under mild pressure. Volatility has started high and may stay that way depending on how headlines develop this 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