Home Mortgage Alliance Corporation (HMAC)

August Retail Sales were better than expected

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Published Date 9/17/2024

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 mild pressure today. The MBS market improved by +10 bps yesterday. This was not enough to decrease mortgage rates or fees. The market experienced high volatility yesterday.

Today's Rate Forecast: Neutral

Retail Sales: Headline August Retail Sales were up +0.1% versus estimates of -0.2%. But Ex-Autos, Retail Sales were up just 0.1% versus estimates of 0.2%. The Control Group which feeds into GDP was up 0.3% which was lower than July's pace of 0.4% but still very stable.

Manufacturing: August Industrial Production was much better than expected, up 0.8% versus estimates of 0.2%. Capacity Utilization also edged out expectations, 78.0 versus 77.9.

Housing: The NAHB Home Builders Sentiment Index will hit at 10 am ET and is expected to be in very low territory in the range of 40. It was reported at 41.

Treasury Auction: We have a 20 year Treasury Bond auction today at 1 pm.

The Fed: The FOMC started two days of meetings this morning. It will conclude tomorrow at 2 pm with the release of their Interest Rate Decision and Policy Statement along with their Economic Projections.

Today's Potential Rate Volatility: Neutral

This morning markets are under mild pressure. Volatility has started at moderate levels on the retail sales 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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