Home Mortgage Alliance Corporation (HMAC)

The July Producer Price Index indicates slowing inflation

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Published Date 8/13/2024

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 +2 bps yesterday. This was not enough to decrease mortgage rates or fees. The market experienced low volatility yesterday.

Today's Rate Forecast: Neutral

Inflation: The July Headline Producer Price Index (PPI) matched market expectations by rising 0.1% on a MOM basis. YOY, it was 2.2% versus estimates of 2.3% and a nice drop from June's revised level of 2.7%. Core PPI was flat at 0.0% which was much lower than expectations of 0.2%. YOY, it was 2.4% versus estimates of 2.7%.

The Fed: We will hear from Atlanta Fed President Bostic this afternoon.

Today's Potential Rate Volatility: Neutral

This morning markets are moving in a narrow trading channel. Volatility has started at moderate levels with the PPI data.

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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