Markets calm despite rise in Initial Weekly Jobless Claims

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Published Date 5/9/2024

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 worsened by -10 bps yesterday. This was not enough to increase mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: Initial Weekly Jobless Claims were higher than expected, up 231K versus estimates of 210K. The four week moving average remained very low at 215K. Continuing Claims remained below 1.8M with a reading of 1.785M versus estimates of 1.790M.

Treasury Auction: We have the most important treasury auction of the week with today's 30 year bond auction.

The Fed: Today we will hear from S.F. President Daly.

Central Banks: The Bank of England kept their key interest rate at 5.25% but signaled that a rate cut could be coming at their next meeting with 2 voting members voting for a cut at this meeting versus 1 member at their prior meeting.

Today's Potential Rate Volatility: Neutral

This morning markets are trading sideways with some room for positive growth. Volatility has started low but will likely increase with the afternoon Treasury auction.

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

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