Mortgage rates hit 6.5%, the lowest level since October 2024
Mortgage rates moved slightly lower again this week following the Labor Day long weekend, reaching a fresh 2025 low.
The average 30-year mortgage rate was 6.5% this week through Wednesday, according to Freddie Mac data, down from 6.56% a week earlier. The average 15-year rate was 5.6%, down from 5.69% last week.
Mortgage rates have remained around 10-month lows in recent weeks, though there’s little evidence that lower rates have boosted homebuying during a seasonally slow part of the year.
Mortgage applications to purchase a home dropped 3% compared to a week earlier, according to Mortgage Bankers Association data, while refinancing applications were up 1%. In a report released Thursday, brokerage Redfin said lower rates had sparked “a trickle, not a surge,” of homebuying demand, likely because many buyers still struggle to afford to buy at today’s prices.
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Friday’s jobs report could lead to more rate movement next week. Weaker-than-expected employment data could indicate that the Federal Reserve needs to speed up its rate-cutting plans to help support the labor market. In that scenario, the bond yields that mortgage rates closely track would likely fall.
Two recent reports suggest the labor market is weakening. Job openings in July were at a 10-month low, according to government data released Wednesday. And private sector job growth was lower than expected last month, with the country adding just 54,000 jobs, according to data processing firm ADP.
“Continued signs of labor market weakness could likely reinforce the current downward trend in rates,” Kara Ng, a senior economist at Zillow, said in a statement. “Conversely, unexpectedly strong employment figures could quickly reverse recent gains.”
Dig deeper: Jobs, inflation, and the Fed: How they’re all related
Last month’s jobs report, which showed weaker-than-expected jobs growth in July and steep downward revisions in previous months, helped push mortgage rates to recent lows after financial markets repriced expectations for future rate cuts.
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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