Mortgage Rates Today, Aug. 29, 2024: Rates Low But More Movement Likely Soon

In brief

Looking at Mortgage News Daily's (MND's) archive, it's easy to see how that happened. Eight of the last nine business days brought modest falls in mortgage rates.

But modest falls add up. And MND reckons those rates have tumbled to 6.37% yesterday evening from 6.56% when the run started on Aug. 16.

With luck, economic data due over the next eight days will bring further falls. But they could just as easily push those rates higher. And some are likely to generate sharper movements than we've gotten used to.

Coming up

Mortgage rates today

Three of today's economic reports sometimes move mortgage rates. But they tend to generate only relatively small adjustments.

And their impacts tend to be swiftly overtaken by the next, more important report. (Spoiler alert: A more important report is due tomorrow.)

First up is the number of initial claims for unemployment benefits during the week ending Aug. 24. They're expected to inch lower to 230,000 from 232,000 last week, according to MarketWatch

At the same time as those jobs numbers are published (8:30 a.m. Eastern), we're due the second reading (of three) of gross domestic product (GDP) growth during the second quarter of this year. Markets aren't expecting a change from the first reading, which came in at 2.8%.

Later, at 10 a.m. Eastern, the July figures for pending home sales should land. The rate at which they're increasing is expected to plummet to 0.1%, down from 4.8% in June.

If GDP and pending home sales come in lower than markets expect, that could exert some downward pressure on mortgage rates. Higher-than-expected numbers could push them upward. The precise opposite is the case for initial jobless claims.

Tomorrow

Tomorrow's really important report is the personal consumption expenditures (PCE) price index. This is the Federal Reserve's preferred measure of inflation.

It's the last such report the Fed will see before it decides on Sep. 18 whether to cut general interest rates and by how much. That decision is crucial for the economy, markets and mortgage rates.

And anything that's likely to influence that decision could easily push mortgage rates sharply higher (if inflation is unexpectedly warm) or lower (if it's cooled more than anticipated).

So, what is expected for tomorrow? Well, the PCE price index comprises four main components. Two measure price changes during the reporting month (July) and two are year-over-year (YOY) figures (Aug. 1, 2023-Jul. 31, 2024).

There are two figures for each period. One measures changes in all prices in the survey. And the second does the same but excludes energy and food prices. The latter is called "core" inflation and is said to better reveal underlying trends.

Here are market expectations, according to MarketWatch:

• July PCE price index — Markets expecting 0.2%, up from June's 0.1%
• YOY PCE price index — Markets expecting 2.5%, unchanged since June
• July core PCE — Markets expecting 0.2%, unchanged since June
• YOY core PCE — Markets expecting 2.7%, up from June's 2.6%
  

Also tomorrow, we're due other elements of the wider July PCE report (personal income and spending), the August Chicago business barometer, and the final reading of consumer sentiment, also for August.

But, if the PCE price index is even a bit unexpected, all of those will likely be in its shade.

Tomorrow's inflation report is so important that we'll delay publishing our report until we can tell you the outcomes. Expect it sometime before 9 a.m. Eastern.