Tomo Mortgage Rate Monitor

Rates hold steady at 6.625%

Updated: July 19, 2024

The quiet week for economic data delivered as expected. Mortgage rates stayed the same across the board. Jobless claims, which are reported weekly, are now trending closer to 250,000/week vs. the 200,000/week it’s been anchored to the past two years. The level is noteworthy, but this weakness was also expected by the market so we did not see a significant market movement when the claims were released on Thursday.

What’s coming this week: Manufacturing and Services PMI early in the week, then GDP, and Friday has the most significant release of the week, with Personal Consumption Expenditures (PCE), which is the Fed’s preferred inflation measure.

Impact on Homebuyers

Homebuyers are seeing some savings in their monthly payments from the beginning of the year. Rates holding steady at 6.625%, which is down from the 7.875% high at the beginning of the year, saves the typical home buyer $286 per month and over $103,000 over the course of a 30 year loan term.

Another way to look at this: A typical buyer will be able to spend almost 10% more on a house, or roughly $35,500, and have the same monthly payment. This assumes a home purchased at $400,000 with 8% down and 740 credit.

Rate Prediction

The Tomo Q2 prediction of 6.625% seems to have arrived a few weeks late. The current data and trend is pointing to an economic slowdown and the market is forming a consensus of three rate cuts in 2024, starting in September.

Quarter	Prediction	Actual
Q1 2024	6.875%	6.875%
Q2 2024	6.625%	7.0%
Q3 2024	6.5%
Q4 2024	6.5%

Current Rates

You can see personalized rates on our current mortgage rates page (we promise they are real rates for real people).

Product	Rate – July 19	Rate – July 12	Change
30 Year Fixed	6.625%	6.625%	no change
30 Year Fixed – VA	6.125%	6.125%	no change
30 Year Fixed – FHA	6.125%	6.125%	no change
30 Year 7/6 ARM	7.5%	7.5%	no change
15 Year Fixed	5.875%	5.875%	no change

Economic Events

Manufacturing and Services Purchasing Manager Indices (Wednesday – 9:45am) These indices measure expansion or contraction in the economy. They are broad surveys of manufacturing and servicing sector companies across the country. Economists are expecting readings of just over 50, which implies a small expansion. Readings below 50 are good for the mortgage and bond market.

Q2 GDP (Thursday  – 8:30am) GDP is expected to grow 2.0%, up front 1.4%, as the elevated rate environment slows down growth. GDP is a slower-moving, backwards looking metric and has less of an effect on weekly mortgage pricing than inflation of consumer-related metrics. 

June Personal Consumption Expenditures (Friday – 8:30am) When the Fed says they have a 2% inflation target, this is the metric they follow. Another measure of inflation, CPI, came in lower than expectations for June, and monthly PCE is forecast to be 0.1%, which would put it below 2.0% annualized. Simply coming in at expectations would be good for bonds and mortgage rates while a level above 0.1% will cause an increase in rates as the market reprices Fed cut expectations.

Next: Calculate Personalized Rates