The Smartest Investors Club
  • Business
  • Politics
  • Investing
  • World
  • Business
  • Politics
  • Investing
  • World

The Smartest Investors Club

Business

Mortgage rates plunge to the lowest level in over a year after weak employment report

by August 5, 2024
August 5, 2024
Mortgage rates plunge to the lowest level in over a year after weak employment report

The average rate on the popular 30-year fixed mortgage dropped 22 basis points to 6.4% Friday, according to Mortgage News Daily. That is the lowest rate since April 2023. The 15-year fixed rate fell to 5.89%, its lowest level since early May 2023.

The drop followed a weaker-than-expected monthly employment report, which sent bond yields falling fast. Mortgage rates loosely follow the yield on the 10-year U.S. Treasury.

“Between [Federal Reserve Chairman Jerome] Powell’s equivocal openness to “multiple cuts” in 2024 on Wednesday and this morning’s sharply weaker jobs report (something Powell didn’t even know about on Wednesday), the more aggressive rate cut narrative is quickly coming into focus,” wrote Matthew Graham, chief operating officer at Mortgage News Daily. 

There are still two inflation reports and another employment report before the Fed’s September meeting, Graham noted, adding, “If they don’t offer strong counterpoints to recent data, the rate cut cycle has not only begun, but it will likely involve a certain sense of urgency.”

The 30-year fixed rate started the week at 6.81%, so the drop in just the past five days is dramatic. The recent high was 7.52% in late April, and home sales have been falling ever since. Buyers were battling not just high interest rates but high home prices and a lack of supply. Supply has since improved, but prices are still overheated.

The difference in just a few months is stark when it comes to affordability. In April, a buyer looking to purchase a $400,000 home with a 20% down payment and a 30-year fixed mortgage would have been facing a monthly payment of about $2,240, not including insurance and property taxes. Today, that monthly payment would be about $2,000. More buyers would also qualify for the loan at today’s lower rates.

Mortgage applications to purchase a home have been running about 15% below where they were at this time last year, according to the Mortgage Bankers Association. This latest drop could kickstart demand.

“The market is moving ahead of the Fed, bringing down longer-term rates including those for mortgages, which should lead to both more home purchases and a pickup in refinance activity,” wrote Mike Fratantoni, chief economist for the Mortgage Bankers Association, in a news release.

This post appeared first on NBC NEWS
0
FacebookTwitterGoogle +Pinterest
previous post
U.S. unemployment rate ticks up to 4.3% amid signs of broader economic slowdown
next post
Middle East braces for week that could determine the course of the Gaza war

You may also like

Microsoft’s mammoth AI bet will lead to over...

Federal Reserve keeps interest rates unchanged for now

Bitcoin is just another tech stock, not a...

U.S. passport processing times return to pre-pandemic levels

UAW reveals newest strike locations at GM and...

Treasury delays deadline for small businesses to file...

Retailers saw a dismal fall quarter. The election...

McDonald’s revenue disappoints, as U.S. sales see worst...

Forget a new bathroom, just fix the faucet:...

Russian oligarch’s yacht is costing U.S. taxpayers close...

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • Trump says 80% tariff on China ‘seems right’ ahead of weekend talks...

    • Crypto Market Recap: Bitcoin Breaks US$100,000 as ETF Inflows Rise, Coinbase Makes US$2.9 Billion Power Play

    • 7 Copper ETFs and ETNs

    • Trump’s tax hike proposal is ‘déjà vu’ of George H. W. Bush’s ‘read my lips’ moment, experts say

    • Pope Francis-era deal with Chinese Communist Party again under scrutiny as Pope Leo takes the reins

    Categories

    • Business (1,633)
    • Investing (4,794)
    • Politics (7,544)
    • World (6,131)
    • Terms & Conditions
    • Privacy Policy
    • About us

    Disclaimer: thesmartestinvestorsclub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 thesmartestinvestorsclub.com | All Rights Reserved


    Back To Top