The average rate on the 30-year-fixed mortgage increased by 27 basis points on Friday morning to 6.53% following the release of the government’s monthly employment report. This rate is 42 basis points higher than it was on September 17, the day before the Federal Reserve cut its benchmark rate by half a percentage point. Mortgage rates generally do not follow the Fed, but tend to loosely follow the yield on the 10-year U.S. Treasury. The expectation for future actions by the Fed plays a significant role in influencing mortgage rates. As a result, there was a lot of anticipation leading up to the latest monthly report due to concerns about weaker labor market conditions.
Matthew Graham, chief operating officer at Mortgage News Daily, pointed out that the Fed’s decision to cut its rates by 0.50% rather than 0.25% last month was influenced by the fear and expectation that reports such as the recent employment report would be less favorable in the future. The latest report has shifted the outlook for rates going forward, as many had assumed that rates would decrease. The Mortgage Bankers Association’s chief economist, Michael Fratantoni, stated that longer-term rates, including mortgage rates, are expected to remain within a relatively narrow range over the next year. However, the recent employment report is likely to push mortgage rates to the top of that range, with expectations that they will remain close to 6% over the next 12 months.
Homebuyers today are highly sensitive to rate changes, as house prices continue to rise from year-ago levels. In addition, there is still very low inventory on the market, which has helped to keep prices high. Although rates are currently one percentage point lower than they were a year ago, the housing market has not seen a significant boost yet. According to the Mortgage Bankers Association, the expectation is for rates to stay close to 6% over the next year, despite the recent increase following the release of the employment report. The current market conditions, with rising house prices and low inventory, are contributing to the sensitivity of homebuyers to any fluctuations in mortgage rates.
The outlook for mortgage rates in the near future has been impacted by the latest employment report, which pointed to weaker labor market conditions. The recent increase in rates following the release of the report has shifted expectations for future rate movements, with many now anticipating rates to remain close to 6% over the next year. Homebuyers today are keeping a close eye on rate changes, as they continue to navigate a market with rising house prices and low inventory levels. Despite rates being lower than they were a year ago, the housing market has not seen a significant improvement yet, due to several factors including high prices and low inventory.
The recent increase in mortgage rates following the release of the government’s monthly employment report has shifted expectations for the trajectory of rates in the near future. The Fed’s decision to cut rates by 0.50% rather than 0.25% last month was influenced by concerns about weaker labor market conditions, which have been highlighted in recent employment reports. The Mortgage Bankers Association’s chief economist expects rates to remain close to 6% over the next year, despite the recent increase. Homebuyers today are particularly sensitive to rate changes, given the current market conditions of rising house prices and low inventory levels, which are contributing to the challenges in the housing market.
Overall, the recent increase in mortgage rates following the release of the employment report has shifted expectations for future rate movements. The anticipation leading up to the report was high, as concerns about weaker labor market conditions were prevalent. The recent rate increase is likely to impact homebuyers, who are already facing challenges in a market with high prices and low inventory levels. Despite rates being lower than they were a year ago, the housing market has not seen a significant improvement yet. The Mortgage Bankers Association expects rates to remain close to 6% over the next year, but the recent increase following the employment report has shifted the outlook slightly.
