| On Monday, the average rate on the popular 30-year fixed mortgage dropped nearly 23 (22.06) basis points to 6.34%, according to Mortgage News Daily. That is the lowest reading since April 7th, 2023. The 15-year fixed rate fell to 5.88%, its lowest level since May 2023. |
| The drop followed a weaker-than-expected monthly employment report that came out last Wednesday, which sent bond yields falling. Mortgage rates loosely follow the yield on the 10-year U.S. Treasury. |
| The Fed is almost certainly going to cut interest rates at its September meeting, if not sooner. However, before then, there are still two inflation reports and another employment report coming. |
Our take |
| There are a lot of pessimists out there who say the latest jobs report is exceptionally bad news. We don’t fully see it that way. The report showed that working-age labor force participation set a new quarter-century record high. Meanwhile, on the subject of interest rates, it seems everyone is now on board with the idea of a rate cut (we thought the case was clear months ago). Treasury yields have fallen and mortgage rates are already at their lowest level in more than a year. To quote Redfin’s Chief Economist Daryl Fairweather, “Homebuyers should start their horses.” |
Mortgage rates plunge to lowest level in 16 months
