Mortgage Rates Today, Oct. 1, 2024: Rates Continue Modestly Higher

In brief

Mortgage rates began to rise on the day the Federal Reserve announced its plans for future cuts to general interest rates. Since that day, Sep. 18, we've seen only three modest falls but six modest rises, according to Mortgage News Daily's archive. And the rises have generally been a little bigger than the falls.

The problem is that markets expected the Fed to cut general interest rates more quickly than it actually planned. So, investors were disappointed and have been in a bit of a sulk.

Meanwhile, markets' bad mood only worsened yesterday when Fed Chair Jerome Powell rubbed salt into the wound. "This is not a committee that feels like it’s in a hurry to cut rates quickly," he told a conference in Nashville, Tenn.

There are no grounds to panic, at least yet. If you ignored all the ups and downs of the last few weeks, mortgage rates today would still be at their lowest for more than a year, says MND. In other words, those rates remain very low by recent standards.

This week's economic reports are likely to be dominated by employment data. A couple of labor-market reports are due earlier in the week before Friday's hugely important official jobs report.

Coming up

When The Wall Street Journal reported on Mr. Powell's remarks yesterday afternoon, it said, "With inflation having fallen considerably over the past two years, officials have shifted their focus toward preventing past rate increases from further weakening the U.S. labor market because they no longer think it poses a risk of sustaining higher inflation."

This reinforces what we wrote yesterday. This Friday's September jobs report is of critical importance to mortgage rates.

If the labor market has continued to deteriorate, that could force the Fed to cut general interest rates more aggressively, helping mortgage rates to fall further and faster.

But, if the employment data show the jobs market recovering, that could accelerate the recent upward mini-trend in mortgage rates. And we don't want that.

Mortgage rates today

Owing to markets' tight focus on employment, all jobs-related economic reports have more potential to affect mortgage rates. And we're due one this morning, the August job openings and labor turnover survey (JOLTS).

It provides worthwhile — if slightly dated — insights into trends in the labor market. MarketWatch says markets expect the headline figure, that month's job openings, to hold steady at 7.7 million in August, the same as in July. A lower number could help mortgage rates today to fall.

Also this morning, we're due two September purchasing managers' indexes (PMIs) for the manufacturing sector. These show activity levels in purchasing departments and can be good indicators of future economic activity. But they tend to affect mortgage rates only modestly and temporarily.

MarketWatch revised market expectations for these since yesterday morning. The Institute for Supply Management (ISM) one is now expected to rise to 47.5% from 47.2% in August. We'd rather it didn't, because a lower-than-expected number might exert a downward influence on mortgage rates.

Construction spending data also tend to have a limited impact on mortgage rates. In another revision since yesterday, this morning's figure, for August, is expected to improve: up to 0.0% that month compared to -0.3% in July. Again, we'd prefer it not to.

Four senior Fed officials have speaking engagements today. Their voices are nothing like as powerful as Jerome Powell's. Still, they might have some modest effect on mortgage rates. We're due speeches from several others over the following days.

Tomorrow

Wednesday's ADP employment report is sometimes seen as a bellwether for the official jobs report. And it concerns the labor market. So we should take it seriously.

The September report is expected to show the number of new private-sector jobs created that month rising to 128,000 from August's 99,000. We can live with that, providing the number isn't noticeably higher than 128,000.

Yesterday, we dismissed the ADP report as "blah, blah, blah." That's not because it's unimportant. It's because its effects are pretty much always steamrollered by the official jobs report, which follows soon after (48 hours later, this month).

Mortgage rates later this week

The same applies on Thursday when two more September PMIs (for the services sector) are scheduled. They might move mortgage rates a bit that day. But any impact they have will likely be flattened by Friday's official jobs report for September, formally called the employment situation report.

If, this time next week, mortgage rates are significantly different from where they stand this morning, the jobs report will very likely have caused the change.

We'll brief you more fully on reports scheduled for later this week well before they're due.