The U.S. economy experienced a surprising twist as worries about an overheated labor market led to a spike in 10-year Treasury yields, pushing mortgage rates above 8% for the first time in 23 years. However, a lower-than-expected jobs report of 150,000 for the month of October, and barely half of the previous month's gain, has brought relief to the housing market. This drop-in mortgage rates, falling below 7.4%, eased the pressure on prospective homebuyers.
The story comes with a caveat, as strikes in the auto industry and other sectors may have artificially lowered job creation figures in October. Although, experts suggest there are signs of a cooling labor market, even after accounting for the striking workers. This cooling labor market is seen as good news for the Federal Reserve, which has been grappling with inflation concerns and may now consider ending the rate hike cycle.
The drop in mortgage rates is noteworthy, providing much-needed relief for homebuyers in an otherwise unaffordable housing market. The question is whether job numbers are cooling, indicate a continuing trend or just a temporary blip – something to keep an eye on for those considering a purchase early next year when the housing market kicks off after the holidays.
If you’re a prospective homebuyer eager to take advantage of the lower rates, reach out and I’ll connect you with a highly reputable Mortgage Advisor who can help get the process started and lock in that lower interest rate.
Read here for more information from Fortune.com, "Mortgage Rates are Dropping Fast After a Shock Jobs Report to Set Off a Series of Dominoes on Wall Street - The Housing Market Can Thank Detroit's Striking Auto Workers, " by Will Daniel and Irina Ivanova.
In good health,
Dan Henry, AH Heritage Home Group of Coldwell Banker