The dip in the mortgage rates followed the release of unexpectedly weak U.S. employment figures for August.
Mortgage rates reportedly took a sharp dip on Friday, with the average 30-year fixed rate reportedly falling to 6.29%. According to a CNBC report, this marked the steepest single-day decline since August 2024 and the lowest level witnessed since early October 2024.
This sharp move followed the release of unexpectedly weak U.S. employment figures for August, which showed a lower-than-expected addition to nonfarm payrolls at 22,000.
According to MarketWatch, Dow Jones had projected 75,000 new nonfarm jobs for August, but the actual data from the Bureau of Labor Statistics (BLS) revealed weaker-than-expected employment growth.
Payroll gains in August were driven mainly by continued hiring in health care and social assistance, while federal employment declined further. The national jobless rate rose again last month, reaching 4.2%, up from 4.1% in July and 4.0% in June, indicating a steady upward trend.
“This was a pretty straightforward reaction to a hotly anticipated jobs report,” said Mortgage News Daily Chief Operating Officer Matt Graham, as per a CNBC report. “It’s a good reminder that the market gets to decide what matters in terms of economic data, and the bond market has a clear voting record that suggests the jobs report is always the biggest potential source of volatility for rates.”
The shift is especially meaningful, given that home prices remain elevated, the report noted. For example, a buyer putting down 20% on a $450,000 home would pay $2,226 monthly at 6.29%, compared to $2,395 at 7%, a drop of $169 each month.
Homebuilder stocks, such as Lennar (LEN), D.R. Horton (DHI), and Pulte Group (PHM), gained following the rate news.
For updates and corrections, email newsroom[at]stocktwits[dot]com.