Mortgage Rates Surge Following Strong Jobs Report, Hitting 6.53%
The average 30-year fixed mortgage rate experienced a significant jump of 27 basis points on Friday, reaching 6.53% according to Mortgage News Daily. This increase comes on the heels of the government’s latest employment report, which showed a stronger-than-expected labor market. The current rate is 42 basis points higher than it was on September 17, just before the Federal Reserve’s decision to cut its benchmark rate by half a percentage point.
While mortgage rates don’t directly follow the Fed’s rate, they are influenced by the 10-year U.S. Treasury yield. As a result, market expectations surrounding the Fed’s future actions play a significant role in shaping mortgage rates. The recent jobs report has shifted the outlook for rates, with many experts anticipating a steady or potentially rising trend.
“The jobs report has certainly changed the narrative, and it’s likely that mortgage rates will remain elevated in the near term,” said Michael Fratantoni, chief economist at the Mortgage Bankers Association. “We still expect rates to hover around 6% over the next 12 months, but this report has pushed them to the higher end of that range.”
Homebuyers are particularly sensitive to rate fluctuations, especially as home prices continue to rise and inventory remains low. Although rates are currently a full percentage point lower than they were a year ago, the housing market has yet to experience a significant boost.
As the market continues to navigate these changes, it’s essential for homebuyers and homeowners to stay informed about the latest developments and their potential impact on the housing market.
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