Three things that could impact rates this week

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Published Date 2/3/2025

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 lower today. The MBS market improved by +21 bps last week. This may have been enough to decrease mortgage rates or fees. The market experienced high 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) Jobs, 2) Tariffs, 3) ISMs.

1) Jobs: We will get a ton of job and wage related data this week leading up to Big Jobs Friday. These include ISMs, ADP, JOLTS, Challenger Job Cuts, Non Farm Payrolls, Unemployment Rate, Average Hourly Earnings and more. The bond market will be very sensitive to this data.

2) Tariffs: The Tariffs on Canada and Mexico were announced Saturday and will officially go into effect in less than 24 hours.

3) ISMs: As far as domestic economic data outside of Jobs, ISM Manufacturing and ISM Services will get the most attention as bond traders will focus on Prices Paid and Employment components.

Bonus Central Banks: The Bank of England is expected to cut by 25BPS and we have several Talking Feds this week which will be very important.

This week's Potential Rate Volatility: High

This morning markets are getting a boost on tariff fears. Volatility has started high and will likely remain that way.

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.

Jeff Beck - NMLS ID: 19488. To verify licensing, visit NMLS Consumer Access (www.nmlsconsumeraccess.org). 

Jeff Beck

Loan Expert

NMLS: 19488

American Home Lending USA

240 S Buchanan St, Edwardsville IL 62025

Company NMLS: 2239

Office: 618-310-0091

Cell: 618-806-2281

Email: jbeck@ahlusa1.com

Web: https://www.americanhomelendingusa.com/