Mortgage rates plunge to the lowest level in over a year after weak employment report
The average rate on the popular 30-year fixed mortgage dropped 22 basis points to 6.4% Friday, according to Mortgage News Daily.
The average rate on the popular 30-year fixed mortgage dropped 22 basis points to 6.4% Friday, according to Mortgage News Daily. That is the lowest rate since April 2023. The 15-year fixed rate fell to 5.89%, its lowest level since early May 2023.
The drop followed a weaker-than-expected monthly employment report, which sent bond yields falling fast. Mortgage rates loosely follow the yield on the 10-year U.S. Treasury.
“Between [Federal Reserve Chairman Jerome] Powell’s equivocal openness to “multiple cuts” in 2024 on Wednesday and this morning’s sharply weaker jobs report (something Powell didn’t even know about on Wednesday), the more aggressive rate cut narrative is quickly coming into focus,” wrote Matthew Graham, chief operating officer at Mortgage News Daily.
There are still two inflation reports and another employment report before the Fed’s September meeting, Graham noted, adding, “If they don’t offer strong counterpoints to recent data, the rate cut cycle has not only begun, but it will likely involve a certain sense of urgency.”
The 30-year fixed rate started the week at 6.81%, so the drop in just the past five days is dramatic. The recent high was 7.52% in late April, and home sales have been falling ever since. Buyers were battling not just high interest rates but high home prices and a lack of supply. Supply has since improved, but prices are still overheated.
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