Three things that could impact rates this week

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Published Date 12/9/2024

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 +26 bps last week. This may have been enough to decrease mortgage rates or fees. The market experienced moderate volatility last week.

This week's Rate Forecast: Neutral

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

1) Inflation: We will get several inflation related data sets this week with CPI, PPI, Import Prices and Unit Labor Costs. The bond market will give the most weight to CPI with YOY Core CPI expected to rise versus its previous reading.

2) Central Banks: We hear from several Central Banks this week. The Bank of Canada is expected to cut 50 BPS on Wednesday and the European Central Bank is also expected to cut although there is much debate on 25 BPS versus 50 BPS at this meeting.

3) Geopolitical: We lost two governments last week with France and Syria with Syria still very much in the headlines. Geopolitical winds swirling around Russia, Ukraine and the Middle East will be very key.

Treasury Auction: Here is this week's Treasury auction schedule.

12/10 3 year note.

12/11 10 year note.

12/12 30 year bond.

This week's Potential Rate Volatility: High

This morning markets are under some mild pressure with a narrow trading channel. Volatility has started low but may increase later in the week on inflation news.

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.

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.