Three things that could impact rates this week

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Published Date 10/30/2023

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 +46 bps last week. This may have been enough to decrease mortgage rates or fees. The market experienced high volatility last week.

Today's Rate Forecast: Higher

Three Things: These are the three things 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 Interest Rate Decision and Policy Statement out of the FOMC. This is not a meeting where they release their Economic Projections. We will get a live presser with Chair Powell at 2:30 pm ET after their policy is released. Currently the bond market is heavily hedged toward no rate change at this meeting.

2) Jobs: We get a ton of job and wage related data this week, culminating in Big Jobs Friday. We get Employment Cost Index, ADP Payrolls, ISM Manufacturing Employment, JOLTS, Challenger Job Cuts, Initial Weekly Jobless Claims, Unit Labor Costs, ISM Non Manufacturing Employment, Non Farm Payrolls, Average Hourly Earnings, Unemployment Rate, U6 Underemployment Rate, Labor force Participation Rate and Average Weekly Hours.

3) Central Banks: We get key interest rate and policy statements out of the Bank of England and the Bank of Japan this week.

Today's Potential Rate Volatility: High

This morning markets are currently moving sideways without any economic data informing. Volatility has started high and will be high all week with the deluge of data.

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.

All loans are subject to credit approval. Interest rates are subject to change daily and without notice. Current interest rates shown our indicative of market conditions and individual qualifications and will vary upon your lock-in period, occupancy, loan type, credit score, purpose and loan to value and lending source.