The big story this week is 30-yr mortgage rates, which are already in the low sixes as the market anticipates multiple Fed rate cuts (and perhaps a recession) ahead.

“Jobs week” has so far delivered a very consistent message — hiring is slowing and layoffs are rising. We know that rate cuts will start on September 18. But will we get a 25 or 50 basis point cut?

It’s time to start cutting rates, said Fed Chairman Jerome Powell in his speech from Jackson Hole last Friday. Mortgage rates have already moved more than 1% lower in the last four months, improving mortgage affordability and making millions of loans refinance-able.

What a week! We had a huge downward revision to the BLS jobs growth figures, the Fed minutes explicitly said that a rate cut on Sept 18 was likely, and average mortgage rates moved below 6.5% (and are now 1% lower than they were a year ago).

Inflation (CPI & PPI) continued to ease in July, and average 30-yr mortgage rates approached 6.5%.

Has the Fed waited too long to start cutting rates? The unexpected climb in the July unemployment rate had the market reassessing recession risks.

The Fed kept rates steady (again), but said that a rate cut on Sept 18 was definitely “on the table” given progress on inflation and the recent rise in the unemployment rate. The bond market rejoiced, helping to send average mortgage rates near 6.6%.

Would-be homebuyers seem to be holding their breath, hoping that the Fed begins cutting rates soon. Home sales have remained subdued this spring/summer. But with the inventory of homes for sale rising, buyers are regaining some negotiating power.

A string of favorable data (lower inflation, higher unemployment rate) has convinced the market that the Federal Reserve will begin cutting short-term interest rates in September, and mortgage rates are already moving lower.

Rate cuts are definitely coming. Fed Chairman Jerome Powell sounded a bit more dovish in his testimony to Congress, and then the CPI inflation report for June came in lower than expected. It is very nice to see 30-yr mortgage rates moving below 7%!

In most cities across the nation, home prices continue to rise — despite high mortgage rates. That’s a tough combination for buyers, leading to lower transaction volumes.

Inflation continued to trend lower and retail sales were flat in May. Excluding the “blowout” May jobs number from the BLS, recent data releases have been noticeably softer.