Bad News for the Labor Market Equals Good News for Mortgage Rates

On Friday, the Labor Department’s closely watched Jobs Report showed that employers only added 22,000 jobs in August instead of the expected 75,000, and the unemployment rate rose slightly to 4.3%. Revised data also showed that employment fell by 13,000 jobs in June, the first net loss since December 2020, which was when the pandemic had largely shut down the economy.

This report should resolve some of the divisions that the Fed officials have had to wrestle with over the timing of restarting interest rate cuts. Before this report, there were still some who did not see an urgent need to lower borrowing costs. This report, along with the July Jobs Report, may prompt more discussion over the pace of forthcoming cuts.

Mortgage rates have been reacting to the weakening jobs market since the July report came out in early August. Over the past four weeks, the rate on a 30-year fixed mortgage has dropped around three-quarters of a percent – from the high 6s to the low 6s. If you think you might benefit from a refinance, please contact me. We’ll track rates specifically for you and let you know when we think you could benefit from a refinance.