Three things that could impact rates this week

___

Published Date 10/7/2024

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 -82 bps last week. This was 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) Inflation, 2) The Fed and 3) Oil.

1) Inflation: We get several key economic releases this week with the markets focused squarely on Thursday's Consumer Price Index followed by Friday's Producer Price Index. The higher these levels are, the worse it will be for rates and vice versa.

2) The Fed: We will get the Minutes from the last FOMC meeting on Wednesday. This will be of major interest to the bond market as we will want to know if the discussion was leaning more towards a 25BPS cut than the one dissenting vote indicated. We will also hear from many Talking Feds this week:

10/07 Kashkari, Bostic and Musalem

10/08 Bostic and Collins

10/09 FOMC Minutes, Bostic, Logan, Goolsbee, Collins and Daly

10/10 Barkin, Williams

11/11 Goolsbee, Logan and Bowman

3) Oil: Oil has been on a tear the past 5 trading sessions and it has been putting pressure on rates. This morning (so far) it is up again due to Geopolitical concerns.

Treasury: Here is this week's Treasury auction schedule, Thursday's 30Y Treasury bond auction is the most important:

10/08 3 year note

10/09 10 year note

10/10 30 year bond

Today's Potential Rate Volatility: High

This morning markets are under pressure. Volatility is moderate to start but will increase later this 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.

First Priority Home Loans is a DBA of Anchor Funding, Inc. NMLS #236419 & 1626581. California Bureau of Real Estate, Real Estate Broker Number 01276087. Loans made or arranged pursuant to the California Department of Business Oversight. California Finance Lenders Law license number 603 L293.