Markets stable as the Bank of England maintains key rate

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Published Date 6/20/2024

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 +10 bps Tuesday. This was not enough to decrease mortgage rates or fees. The market experienced moderate volatility Tuesday.

Today's Rate Forecast: Neutral

Housing: Across the board, weaker than expected housing news with May Building Permits dropping to 1.386M units on an annualized basis versus estimates of 1.450M. Same story with Housing Starts which dropped to 1.277M versus estimates of 1.370M.

Jobs: Initial Weekly Jobless Claims came in higher than expected for the 2nd week in a row, hitting 238K versus estimates of 235K. The four week moving average ticked upward to 232K. Continuing Claims were 1.828M versus estimates of 1.810M.

Manufacturing: The June Philly Fed Manufacturing Survey fell from 4.5 down to 1.3, the markets had priced in a gain to 5.0.

The Fed: We will get the Atlanta Fed's Business Inflation Expectations at 10 am and we will hear from Kashkari, Barkin, and Daly.

Central Banks: The Swiss National Bank lowered their interest rate from 1.50% to 1.25%. The People's Bank of China kept their interest rate at 3.45% and the Bank of England kept their interest rate at 5.25% with a dovish signal by having 2 votes for a rate cut and 7 votes to keep rates the same and no votes for a hike.

Today's Potential Rate Volatility: Neutral

This morning markets are moving sideways. 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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