Three things that could impact rates this week

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Published Date 8/26/2024

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 +19 bps last week. This was not enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This week's Rate Forecast: Lower

Three Things: These are the three areas that have the greatest ability to impact rates this week. 1) Inflation, 2) The Fed and 3) The Consumer.

1) Inflation: We get the Fed's key measure of inflation, Core PCE on Friday. It is expected to rise 0.2% on a MOM basis and remain in the 2.6% to 2.7% ranger on a YOY basis. If it is below that range, it will put a 50BPS September Fed Rate cut more in focus. But if it is higher than that, it will solidify a 25BPS cut.

2)The Fed: Now that Jackson Hole is over, the markets are continuing to try to front run the size of the Fed's September cut and any speeches this week will provide some more clarity/direction.

08/26 Daly

08/28 Bostic, Waller

08/29 Bostic

3) The Consumer: Tuesday's Consumer Confidence report and inflation expectations will be the most important economic release (other than PCE). We will also get the Consumer Sentiment Index on Friday.

This week's Potential Rate Volatility: High

This morning markets took an initial hit but are back to sideways trading. Volatility has started at moderate levels but will increase later in the week on inflation and consumer 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

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.

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