Mortgage rates fell year-over-year following a disappointing Jobs report

It’s been a challenging year so far for homebuyers, but Friday offered a glimmer of hope.

According to Mortgage News Daily, the 30-year fixed mortgage rate fell 22 basis points to 6.4%, while the 15-year fixed rate fell to 5.89%. The lowest rates since April 2023, and May 2023, respectively.

Mortgage rates have a big impact on how much homeowners end up paying each month. With housing prices rising in many states, interest rates can make or break a potential buyer’s plans.

“In the middle [Federal Reserve Chairman Jerome] Powell’s equal openness to “multiple cuts” in 2024 on Wednesday and a very weak jobs report this morning (something Powell didn’t even know about on Wednesday), the reduced energy narrative will quickly come into focus,” Matthew Graham, CEO. CEO of Mortgage News Daily, wrote in a news update.

Mortgage rates change every day, following the economy—things like inflation and job growth. But while falling prices are good for house hunters, they can actually be a sign that the economy is getting worse. And a weaker-than-expected monthly employment report was released on Friday.

Data from the US Bureau of Labor Statistics (BLS) shows the addition of 114,000 jobs in July, which was below analysts’ expectations, and below the average monthly gain over the past year (215,000 jobs). The unemployment rate has risen for three months in a row, too, which experts say has historically been a sign of recession.

In addition to cooling mortgage rates, home prices also took a long-term dip. The national median list price went from $445,000 in June to $439,950 in July, according to a Realtor.com report. However, that is in contrast to housing construction, which increased by 36.6%.

Home loan applications, which are down about 15% from last year, according to the Mortgage Bankers Association, may be starting to pick up. With far more homes on the market than there are for sale, that would be welcome news for sellers in 2024.