The Bank of England remained steady on their key interest rate

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Published Date 2/1/2024

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 +20 bps yesterday. This may have been enough to decrease mortgage rates or fees. The market experienced high volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: The January Challenger Job Cuts showed a very large spike in corporate announced layoffs from 35K in December to 82K in January. Initial Weekly Jobless Claims were a little higher than expected, 224K versus estimates of 212K. The more closely watched 4 week moving average ticked up to 207K which is still very low. Continuing Claims were 1.898M versus estimates of 1.840M.

Manufacturing: The preliminary 4th QTR Non Farm Productivity rate was much better than expected, up 3.2% versus estimates of 2.5%. Unit Labor Costs rose at a very tame 0.5% versus estimates of 1.7%. The benchmark ISM Manufacturing PMI remained in contractionary territory with a reading of 49.1 versus estimates of 47.0. Prices Paid were 52.9 versus 46.9 and the Employment Index was 47.1.

Construction: December Construction Spending 0.9% versus estimates of 0.5%.

Central Banks: The Bank of England kept their key interest rate at 5.25%. They had one vote to lower rates and 2 votes to increase rates and the rest of the votes were to leave it alone.

Today's Potential Rate Volatility: Neutral

This morning markets are mostly moving sideways. Volatility has started low.

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

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.

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