Three things that could impact rates this week

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Published Date 12/2/2024

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 improved by +63 bps last week. This was enough to decrease mortgage rates or fees. The market experienced high volatility last week.

This week's Rate Forecast: Higher

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

1) Jobs: Its the first week of a new month which means its time for Big Jobs Friday! We get a TON of job and wage related data every day this week starting off with today's ISM Manufacturing Employment Index and culminating with Friday's Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings and more. Broadly speaking, the higher the wage data appears the worse it will be for rates. However for jobs numbers more weight will be given to the private sector reports (Challenger, ADP, ISM) versus that from the BLS.

2) The Fed: We have a busy schedule this week as we enter the media "black out" period next week leading up to the December FOMC meeting. Wednesday will take center stage as we hear from Fed Chair Powell and get the Beige Book.

3) Geopolitical: As the Cabinet picks are rounding out and the markets know who the Treasury Secretary, Commerce Secretary will be along with the heads of the SEC, etc. Markets are trying to gauge the bifurcation of deeper tariffs versus massive Government waste/costing cutting (DOGE), lower regulations, etc.

This week's Potential Rate Volatility: High

This morning markets are under pressure as traders return to business. Volatility has started at moderate levels with lots of potential to increase to high levels 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.

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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.

Darren Orshoff is a Marketing and Real Estate professional, licensed Realtor with the California Department of Real Estate DRE#01803671 with WSR Real Estate DRE#01977642.  Darren is also a Certified Mortgage Planner, A Certified Financial Literacy Coach, A Dave Ramsey Trained Financial Coach, A Certified Mortgage Advisor, and while Darren is licensed by the NMLS, he is not originating loans but refers lending transactions to Golden Empire Mortgage, Inc. ("GEM") [NMLS ID No. 2427] licensed by the Department of Financial Protection and Innovation pursuant to the California Residential Mortgage Lending Act, for which he represents as the Corporate Marketing Coordinator.

Darren Orshoff

Realtor, Marketing Guru, Sushi Lover, Dad, Ham

License: CalDRE#01803671

The Key To Your Home!™ at WSR

6736 Palm Avenue, Riverside CA

Office: 951-468-8326

Cell: 951-323-2119

Email: darren@darrenorshoff.com

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