Three things that could impact rates this week

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Published Date 1/29/2024

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 +7 bps last week. This was not enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This week's Rate Forecast: Neutral

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) The Fed, 2) Jobs and 3) Central Banks.

1) The Fed: We will get the Fed's latest FOMC Interest Rate Decision and Policy Statement Wednesday at 2 pm ET followed by a live presser with Fed Chair Powell.

2) Jobs: We get a ton of job and wage related data all throughout the week culminating in Big Jobs Friday. We will get employment components in ISM as well as Unit Labor Costs, Employment Cost Index, ADP, JOLTS, Weekly Claims, Challenger Job Cuts, Non Farm Payrolls, Unemployment Rate, Average Hourly wages and more.

3) Central Banks: We will get an important Interest Rate Decision and Policy Statement out of the Bank of England.

This week's Potential Rate Volatility: High

This morning markets are trading in a narrow channel. Volatility has started at moderate levels but will likely increase later in the 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.

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.