Last Week's Mortgage Rate Recap: Rates improved 👍
Mortgage rates improved to the best levels seen in months last week. On Wednesday we saw improvement after the Fed left its policy rate unchanged, but opened the door to rate cuts starting at the next meeting in September. On Friday labor market data showed a jump in unemployment and much fewer new jobs created than was expected, which all but guaranteed the Fed will start cutting at the next meeting.
This Week's Mortgage Rate Forecast: Rates likely to be volatile ⚠️
This week will likely see mortgage rates pull back after dropping more than was expected last week. Although there is not a lot of economic data this week, markets have shown a major overreaction to last week's data. Stocks have plummeted, and traders now believe the Fed will be forced to make bigger and more frequent rate cuts to save the economy from a deep recession. Mortgage rates have moved lower too quickly, which often is followed by a rebound and moves higher.
What's affecting rates this week:
- Market volatility: Lenders will struggle to maintain stability with mortgage rates this week as markets whipsaw.
- Fed cuts: Markets now pricing in large Fed rate cuts to come, much larger than were considered only a week ago.