Three things that could impact rates this week

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Published Date 8/19/2024

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 +14 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) Geopolitical and 3) Treasury Auction.

1) The Fed: The Federal Reserve will be the dominate force this week with the release of the Minutes from the last FOMC Meeting and Kansas City Federal Reserve's Jackson Hole Wyoming Economic Symposium that officially kicks off on Thursday. We will hear from Fed Chair Powell on Friday.

2) Geopolitical: The ramp up in Ukraine/Russia will have a lot of market attention as will Israel/Iran as any escalation will drive money into bonds.

3) Treasury Auction: We have an important 20Y Treasury bond auction on Wednesday.

This week's Potential Rate Volatility: High

This morning markets are stable. Volatility has started low but will increase on mid week news and potential geopolitical issues.

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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