Mortgage Rates Today, Sep. 4, 2024: Is Volatility Looming?

by Peter Warden in Rates

September 4, 2024, 8:30 AM UTC 4 MIN

Home builder on roof: mortgage rates today

The average 30-year fixed rate mortgage is 6.26% today, a decrease of 0.06% since yesterday. The 15-year fixed mortgage rate stands at 5.29%, down by 0.08%. The 30-year FHA mortgage now averages 5.6%, having dropped by 0.05. Meanwhile, the 30-year jumbo mortgage rate is 6.82%, reflecting a decrease of 0.03%.

In brief

U.S. stock markets panicked yesterday about the possibility of an American-led economic slowdown. However, mortgage rates begin this morning only a little lower than they were 24 hours earlier.

The S&P 500 dropped 2.1%, the Nasdaq Composite 3.3%, and the Dow Jones Industrial Average about 626 points, or 1.5%. And it didn't stop there. Stock markets tumbled overnight in Asia and Europe.

If this continues much longer, it might lower mortgage rates. Investors are likely to put some of the proceeds of their stock sales into safe-haven bonds, including mortgage-backed securities (MBSs).

And the extra demand for MBSs should push their prices higher, which inevitably means lower yields and mortgage rates.

Markets will likely be desperate for economic data to confirm or disprove their slowdown fears. And that may see them place much more weight on reports that they often shrug off. Meanwhile, Friday's jobs report may take on even greater significance.

Mortgage Rate Trends: Past 90 Days

Purchase Rates

Loan Type	Rate	APR	Daily Change	Monthly Change
30-Year Fixed	6.26%	6.3%	-0.06%	-0.18%
15-Year Fixed	5.29%	5.35%	-0.08%	-0.15%
30-Year Fixed FHA	5.6%	6.44%	-0.05%	-0.14%
30-Year Fixed VA	5.65%	5.8%	-0.09%	-0.11%
30-Year Fixed USDA	5.54%	5.67%	-0.16%	+0.04%
30-Year Fixed Jumbo	6.82%	6.85%	-0.03%	-0.24%
5/6 Year ARM	6.73%	6.79%	-0.08%	+0.25%

Refinance Rates

Loan Type	Rate	APR	Daily Change	Monthly Change
30-Year Fixed	6.37%	6.41%	-0.09%	-0.15%
15-Year Fixed	5.28%	5.35%	-0.08%	-0.16%
30-Year Fixed FHA	5.6%	6.44%	-0.05%	-0.15%
30-Year Fixed VA	5.65%	5.8%	-0.09%	-0.11%
5/6 Year ARM	6.87%	6.94%	-0.03%	+0.31%

Yesterday

This morning's Wall Street Journal reckoned, "Traders returned from the Labor Day holiday to data suggesting continuing gloom in the manufacturing sector, rekindling concerns about the health of the economy."

Well, maybe. But we doubt that's the whole story.

Of the two August purchasing managers' indexes (PMIs) that day, the S&P one showed a tiny drop to 47.9 from 48.0 in July, and the ISM one showed a small improvement, to 47.2 from July's 46.8. July construction spending fell at the same rate as in July (-0.3%).

It's true that the ISM PMI and construction spending had been expected to improve more than they did over their previous reporting periods, but only by a bit. So, perhaps we witnessed another market panic (like the Aug. 6 one) rather than a rational reaction to data.

Coming up

Mortgage rates today

Whether or not yesterday's stock market movements were rational, we are where we are. And that's a place where investors are likely to be unusually sensitive to incoming data.

This morning's economic reports often pass by unnoticed. But that may not be the case today.

Perhaps the one most likely to draw attention is the July job openings and labor turnover survey (JOLTS). Investors know that the Federal Reserve will be looking especially closely at employment data as it decides two weeks today whether to cut general interest rates by a quarter or half a percentage point.

According to MarketWatch, markets are expecting the JOLTS job openings number to be 8.1 million, down slightly from June's 8.18 million. A lower-than-expected figure might exert downward pressure on mortgage rates.

Also this morning, the July U.S. trade deficit is expected to widen to -$79.1 billion from -$73.1 billion in June. And July factory orders are anticipated to have jumped to a 5.0% rise following a -3.3% fall in June.

Mortgage rates tend to fall when the economy's doing badly. So, we'd like a bigger deficit and a smaller improvement in factory orders than expected.

Tomorrow

We'll brief you more fully on Thursday's economic reports before they're published tomorrow. But the ones to watch are probably:

The ADP employment report ➖Although private-sector only, this is sometimes seen as a bellwether for Friday's much more important official jobs report
Initial jobless claims for the week ending Aug. 31 ➖Another employment report
Productivity in the second quarter ➖ First revision
Two August PMIs for the services sector, one each from the ISM and S&P Global

Friday

Friday's August jobs report (formally called the employment situation report) is always one of the two most important economic reports each month. And this month it could be more crucial to mortgage rates than ever.

In an e-newsletter yesterday, Comerica Bank Chief Economist Bill Adams gave his take on how the report might turn out:

"Job growth likely rebounded in August after Hurricane Beryl weighed on July’s increase, but delayed reports from businesses affected by the storm last month could fuel downward revisions to July’s already weak job growth. Wage growth likely held at the lowest since 2021 as lower-paid hourly workers who missed work during the July survey rejoined the workforce in August."

We'll delay publishing our report that day so we can tell you the actual data and give you our assessment of their likely impact.

About The Author:

Peter Warden has been covering mortgage, real estate, and personal finance for 15 years. He has appeared on The Mortgage Reports, Credit Sesame, Bills.com, and other publications.