Unlocking the Future: Latest Trends in Mortgage Rates for September 2024

We provide daily updates on mortgage rate trends, drawing from nearly two decades of experience. It’s an excellent resource to quickly understand rate movements and the factors influencing them. If you’ve been following along recently, you would have seen multiple reminders that today’s Fed rate cut does not necessarily translate to lower mortgage rates. In fact, mortgage rates often rise on the same day the Fed cuts rates, which is exactly what happened today.

Interestingly, mortgage rates were already slightly higher than yesterday before the Fed made their announcement. The bonds that influence mortgage rates suggest rates may go even higher tomorrow unless there’s significant improvement overnight. Here’s a quick rundown of why this seeming contradiction occurs:

– The Fed meets 8 times a year, while mortgage rates can change daily.
– The bonds affecting mortgage rates can fluctuate every second.
– Mortgage rates often lower well before the Fed’s scheduled meetings.
– Traders, anticipating the Fed’s moves, adjust their positions in advance, leading to recent drops in rates.

Unveiling the Latest Mortgage Market Trends and Analysis for September 2024

What does a dyslexic pirate say? RRRRRRA! Humor aside, adversity, including dyslexia, is a common challenge within our industry. Recently, I received a message asking about Robbie’s interview with Glenn Stearns from Monday and wanting to know if it was available online. Indeed, it is accessible here and offers valuable insights for maintaining perspective on adversity. The Consumer Finance Protection Bureau (CFPB) aims to alleviate difficulties for borrowers, and another message I received asked whether borrowers are well-informed about both rates and fees, or just focused on rates. I’d say it’s mostly rates, but the CFPB is dedicated to ensuring consumers are treated fairly and that both rates and fees are clearly highlighted by lenders during transactions.

Speaking of the CFPB, our industry is no stranger to rumors. Remember the initial TRID rollout in 2015 and the subsequent release of TRID 2.0 in 2017 and 2018? There are whispers that the CFPB may once again review the model, incorporating industry feedback. Could this mean a TRID 3.0 on the horizon? Stay tuned for updates.

Today’s podcast is available here and this week’s sponsor is Visio Lending. Visio has an exceptional broker program

Navigating Market Uncertainty: Mortgage-Backed Securities Slump Amid Volatile Rates

A 50-basis-point Fed rate cut holds significant implications. Whether it happens now, or at the next Fed meeting, or later, it will inevitably come. Although Hamlet pondered the inevitability of fate with sparrows, he wasn’t quite a Fed analyst. However, he did touch on a critical concept: one event influences the next. This principle applies to the Federal Reserve’s decisions. If the Fed opts for a rate cut smaller than 50 basis points, future projections might indicate additional cuts. Conversely, a 50-basis-point cut could suggest fewer future reductions. While initial market volatility will likely respond directly to the rate cut, the longer-term impact will be shaped by future expectations, commonly referred to as “the dots.” Since there’s no strong consensus on these projections, attributing market moves to specific factors becomes speculative. The important takeaway is being prepared for whatever the Fed decides.

Unexpected Turn in Mortgage-Backed Securities: September Market Recap

Key Points About Wednesday’s Fed Announcement

The market is in disagreement over the extent of the Fed rate cut expected on Wednesday, making this particular meeting quite intriguing. However, the actual size of the rate cut might be less significant in influencing market reactions compared to the dot plot landscape, which reveals changes in each Fed member’s rate expectations as outlined in the Summary of Economic Projections. Additional clarity will come from Powell’s press conference at 2:30 PM. Volatility could swing in either direction, with potential fluctuations before settling.

Economic Data and Events

Retail Sales: 0.1 against a forecast of -0.2, previous 1.0
Industrial Production: 0.8 against a forecast of 0.2, previous -0.9
NAHB Builder Confidence: 41 against a forecast of 40, previous 39

Market Movement Recap

11:06 AM: Generally weaker following Retail Sales and Industrial Production data. MBS down 0.125 and 10yr yield up 1.9bps at 3.638.
01:45 PM: Holding steady at weaker levels. MBS still down 0.125 and 10yr yield up 2.7bps at 3

Understanding the Latest Trends in Mortgage Rates for September 2024

Mortgage rates have dropped by nearly 2% from their peak last year. This decline is largely a typical adjustment as long-term rates realign with anticipated changes in short-term rates. Essentially, mortgage rates have already factored in the Federal Reserve’s expected actions, not just for the upcoming meeting but for several future meetings as well. The Fed Funds Rate is an overnight rate, meaning it applies to loans of less than 24 hours. In contrast, a 30-year fixed mortgage rate represents a loan that typically lasts about 3 to 10 years, due to most homeowners selling or refinancing before reaching the 30-year mark. For simplification, think of a mortgage as akin to a 5-year loan, behaving similarly to a 5-year Treasury yield, which serves as a risk-free benchmark for other U.S. rates. The Fed Funds Rate is comparable to a 1-day Treasury yield. Investors evaluate loans and bonds based on their prevailing rates and market preferences for different bond durations. Typically, longer-term bonds reflect the current short-term rates plus projections for future changes. Hence, if you could predict the Fed Funds Rate movements over the next two years, you would have significant insight into the current 2-year Treasury yield.

Navigating the Mid-September Mortgage Market: Key Trends and Insights for 2024

This morning’s Retail Sales report came in stronger than anticipated, but the detailed breakdown (similar to core CPI versus headline CPI) offered a more subdued view. Consequently, there wasn’t significant pressure on bonds to sell. If the current levels hold or improve, they would represent the second lowest closing yields of the year.

This places the market in a favorable position ahead of tomorrow’s Fed announcement. Even a 10 basis point sell-off in bonds would still keep yields relatively low in the broader context.

Unveiling the Latest Mortgage Trends: Insights You Can’t Miss from Pipeline Press

Does it evoke a feeling of continuity thinking that the same moon pirates observed 300-400 years ago is still visible now? This week, North America will witness a lunar eclipse tonight, followed by Talk Like a Pirate Day on Thursday. Yet, the notion of permanence is fleeting. The world mourns the passing of Tito Jackson, known from Eddie Murphy’s standup comedy and a memorable video (Imagine someone pulling off that routine at the next mortgage conference!). Compensation for middle management and loan officers continues to evolve. For insights into current salary trends, check out STRATMOR’s latest blog, “Lenders and Vendors Must Pay to Play.” Similarly, interest rates are ever-changing. Despite headlines suggesting otherwise, the anticipated rate cuts by the Federal Reserve this week are unlikely to significantly lower mortgage rates for home buyers. Most industry experts believe that current rates have already accounted for the Fed’s anticipated actions, and don’t foresee a significant impact on the mortgage market, credit card financing, or other areas. Today’s podcast, sponsored by Visio Lending—the nation’s leading lender for buy-and-hold investors, spotlighting an interview with real estate agent Kamyar Rezaie about the NAR settlement and housing demand in the Los Angeles market—is available here.

Analyzing September’s Trend: Mortgage Rates Steady Amid Mixed Economic Signals

A Routine Waiting Game

Bonds showed initial strength today, though they pulled back to neutral levels after the release of manufacturing data. However, they gradually gained moderate traction as the day progressed. Despite the lack of significant bullish drivers, this movement remains within the yield range seen during last week’s volatile consolidation. Notably, Fed Funds Futures surged, making a 50bp rate cut the frontrunner again—largely driven by trader speculations over data. This sentiment was bolstered by recent articles from insiders like Timiraos and Dudley.

Economic Data/Events

NY Fed Manufacturing

11.5 vs forecast of -3.9, previous -4.7

Market Movement Recap

08:52 AM: Started moderately stronger through the night but lost some ground after NY Fed Manufacturing data. MBS steady, and the 10-year Treasury yield up 0.2bps at 3.658%.

12:31 PM: Holding steady near stronger levels. MBS up by 3 ticks (0.09), and the 10-year yield down 2.2bps at 3.632%.

02:42 PM: Little change since the last update, slightly stronger market. MBS up by an eighth, and

Understanding the Factors Behind Rising Mortgage Rates in 2024

The week kicked off quietly regarding mortgage rate fluctuations and bond market activity. Earlier today, a Manufacturing survey introduced minor volatility, creating challenges for bonds. Typically, this would suggest a slight increase in mortgage rates, but bonds quickly rebounded and remained strong throughout the day. Consequently, mortgage rates stayed near their recent lows, with the average lender offering the lowest rates since February 2023 for the fourth consecutive day. This stability, however, may be short-lived.

Significant economic reports are due, starting with tomorrow’s Retail Sales data. The highlight of the week will be the Federal Reserve’s announcement on Wednesday afternoon. Traders are now leaning slightly towards a 0.50% rate cut instead of the minimum 0.25%. Yet, the critical aspect of the announcement will be the Fed’s economic projections and the guidance provided by Fed Chair Powell in the press conference. This meeting marks a rare occasion with a nearly even split in market forecasts. Given this division, market volatility appears inevitable, though its direction—positive or negative—remains uncertain.

Navigating Market Shifts: Insights on MBS and Interest Rate Volatility

This week has seen bonds rally slightly during overnight trading only to pull back after the release of stronger NY Fed Manufacturing data this morning. As a result, both MBS and Treasuries are showing marginal improvements, leading to a relatively flat start to the day. However, any expectations of stability are likely short-lived. The market is highly divided, more so than ever since the era of increased Fed transparency began, with differing opinions on the anticipated outcomes. This week could see significant surprises not only regarding the rate cut but also in reaction to the updated dot plot. While the potential for increased volatility is high, any statements from the Fed on Wednesday will still hinge on the same economic data that has influenced current market conditions.

The past week’s market uncertainty is evident, transitioning from a 50/50 probability to nearly an 80% chance of a 25 basis point rate cut, and now to approximately a 70% chance of a 50 basis point cut.