Mortgage rates are still heading in the right direction for homebuyers, but that could change on Friday with the much-anticipated jobs report.
The 30-year fixed-rate mortgage averaged 6.5% this week, according to Freddie Mac’s survey, an 11-month low. Mortgage News Daily, which uses a different set of criteria to determine average mortgage rates, showed rates trending down this week, landing at 6.45% on Sept. 4.
Almost a year ago, mortgage rates dropped to 6.08%, the lowest level since Sept. 2022 — but soon shot up due to surprising jobs data and pre-election uncertainty, even as the Federal Reserve began cutting short-term interest rates.
Now, a year later, another jobs report could prove pivotal in determining where mortgage rates go next. Related reports from earlier this week, including one showing fewer job openings, suggest the Sept. 5 release will point to further weakening of the labor market.
‘Volatility ahead’
“Historically, a weaker or softer-than-expected jobs report fuels optimism for Federal Reserve rate cuts and can lower bond yields, thereby nudging mortgage rates downward,” said Hannah Jones, senior economic research analyst at Realtor.com.
“Conversely, a robust job report may reinforce inflation concerns and elevate Treasury yields, putting upward pressure on mortgage rates. This setup underscores the potential for increased mortgage rate volatility ahead,” Jones noted.
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Author: Dave Gallagher
