Challenger Job Cuts remain high

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Published Date 10/3/2024

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 yesterday. This was not enough to increase mortgage rates or fees. The market experienced moderate volatility yesterday.

Today's Rate Forecast: Neutral

Jobs: The September Challenger Job Cuts report was about 70K (72,820) for the second straight month which is a very high trend. Initial Weekly Jobless Claims were 225K versus estimates of 220K. The 4 week moving average dropped to 224K. Continuing Claims remained elevated at 1.826M.

Service: The September ISM Non Manufacturing (services) PMI remained in expansionary territory with a better than expected reading of 54.9 versus estimates of 51.7. Prices Paid shot up from 57.3 to 59.4 and the Employment Index moved from 50.2 to 48.1.

Manufacturing: August Factory Orders contracted by -0.2% versus estimates of 0.0%.

The Fed: Today we will hear from Schmid, Bostic and Kashkari.

Today's Potential Rate Volatility: Neutral

This morning markets are under pressure. Volatility has started at moderate levels.

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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