Three things that could impact rates this week

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Published Date 9/30/2024

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 under pressure today. The MBS market worsened by -7 bps last week. This was not enough to increase mortgage rates or fees. The market experienced high volatility last week.

Today'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) PMIs.

1) The Fed: We have a very busy Fed speak schedule that is kicked off this Monday with Fed Chair Powell.

09/30 Powell, Bowman

10/01 Bostic

10/02 Hammack, Musalem, Bowman and Barkin

10/03 Bostic, Kashkari

10/04 Williams

2) Jobs: We get a ton of job and wage related data this week culminating in Big Jobs Friday. The bond market will be very sensitive to any weakness in the overall wage and/or job picture as we get JOLTS, ADP, Challenger Job Cuts, Initial Weekly Jobless Claims, Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings, U6 Underemployment Rate, Average Work Week Hours and Labor Force Participation Rate.

3) PMIs: This week we will get Chicago PMI and both ISM Manufacturing PMI and ISM Services PMI with the focus on the later. Also in the same genre is Factory Orders and the final September flash PMI readings.

Today's Potential Rate Volatility: High

This morning markets have started under mild pressure. Volatility has started at moderate levels but will 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

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