Mortgage rates moved lower as the calendar turned from July to August, mainly because of labor market data that came out on August 1.
The jobs data released by the Bureau of Labor Statistics (BLS) showed a much weaker labor market picture than expected, including huge revisions lower to the previous two months. Weak labor data will usually help mortgage rates move lower, due to how labor affects bonds and other parts of the economy. That was the case here as well, with mortgage rates making a noticeable move lower from the end of July into the beginning of August.
By Monday, August 4, rates had fallen an average of about a quarter point (0.250%). From then on, though, rates were generally about the same, moving slightly higher around the 21st before falling again to end the month a bit lower than it began.
Mortgage rates in September are expected to make some bigger day-to-day moves than we saw in August, especially when the Fed meets in the middle of the month. The next BLS jobs report will come out Friday, September 5, and could cause big moves like it did last month. Whether those moves are good or bad for mortgage rates will depend on whether the data shows labor market recovery or further weakness. Weakness could push rates at least a little bit lower, while strong data could push them back up to levels closer to what we saw in July.
One thing to note this month is when the Fed meets, markets are expecting it to cut its policy rate by 0.25%. THIS CUT WILL NOT BRING MORTGAGE RATES LOWER.
Mortgage rates already account for the expected cut. However, if the Fed leads markets to believe more cuts are coming, that WILL help rates move at least a little bit lower. Mortgage rates move on anticipated Fed actions, not when the Fed actually acts.
I know it can be confusing, so if you want to learn more, please just reach out and I can explain.
If you're interested in learning more about rates, whether to buy a home or possibly refinance, just let me know.
