Published Date 8/28/2023
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.
Mortgage rates are moving sideways today. The MBS market improved by +8 bps last week. This was not enough to decrease mortgage rates or fees. The market experienced high volatility last week.
Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Inflation, 2) Jobs and 3) Manufacturing.
1) Inflation: After Powell said on Friday that the Fed would not move their target rate from 2% and that they would keep pressing until inflation actually hit that goal, this week's inflation related data will be very important. On Thursday we will get the Fed's key measure of inflation, Core PCE. It is expected to increase YOY from 4.1% to 4.2% which of course is still double their target rate.
2) Jobs: We get Big Jobs Friday this week ahead of the long holiday weekend. Throughout the week we have a ton of job and wage related data points including: JOLTS, ADP, Initial Weekly Jobless Claims, Challenger Job Cuts, Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings and more.
3) Manufacturing: We get some very big name manufacturing reports this week with both Chicago PMI and ISM Manufacturing PMI. We will focus on the internals for employment and prices paid.
Treasury Auctions: Here is this week's Treasury auction schedule:
08/28 2 YEAR and 5 YEAR Notes
08/29 7 YEAR note
This morning markets are treading water. Volatility has started low but expect it to skyrocket if any of our key reports this week miss expectations.
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: TBWSAll 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.
NMLS: 250609 / DRE 01137630
Allianze Mortgage Services
15820 Whittier Blvd. Suite G, Whittier CA 90603
Company NMLS: 346138 / DRE 01403147
Office: 949-241-2527
Cell: 949-241-2527
NMLS: 250609 / DRE 01137630
Cell: 949-241-2527
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