Mortgage rates are slightly higher this morning, but are expected to decrease following a disappointing jobs report.
The average interest rate for a 30-year fixed-rate mortgage is now at 6.54% APR, as reported by Zillow to BW. This is an increase of seven basis points from yesterday, but a decrease of 16 basis points from last week. (Refer to the chart below for more details.) A basis point is equivalent to one one-hundredth of a percentage point.
This morning, the Bureau of Labor Statistics released the Employment Situation Summary for July, also known as the jobs report. Expectations were for an addition of 83,000 jobs with no change in unemployment, but the actual figures showed a loss of 23,000 jobs. Unemployment remained relatively stable. Additionally, the numbers for May and June were revised downward, resulting in a lower total number of jobs added during those months.
Given the struggling labor market, the Federal Reserve’s response to inflation may be less clear. While markets have been anticipating rate hikes, the current situation may impact the Fed’s decision-making process. For more on this topic, continue reading below the chart.
Average mortgage rates, last 30 days
📈 What influences mortgage rates?
“The [employment] data complicates the Fed’s decision-making process, as they weigh the risks of inflation against the state of the labor market,” explains BW senior economist Elizabeth Renter. “Upcoming economic data will guide their next steps, but uncertainty may persist, forcing the Fed to make informed guesses.”
If inflation remains a concern, any potential decrease in mortgage rates following the latest employment data may be limited. However, signs of inflation moderation could lead to a softening of mortgage rates.
Taking advantage of a float-down option allows you to secure a better interest rate if the market drops during your rate lock period. Rate locks provide protection against rate increases while your loan is being processed, giving you peace of mind in a fluctuating market. It’s important to remember that rates can change frequently, so if you’re satisfied with the rate you’ve been offered, it may be a good idea to commit to it. The rate you see advertised online is typically a sample rate for borrowers with excellent credit, a large down payment, and who are willing to pay for mortgage points. original sentence:
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