The 30-year fixed-rate mortgage averaged 6.7%, a decrease from 6.87% the previous week, marking the lowest rate since March. July's employment report indicated only 73,000 jobs were created, failing to meet forecasts and leading to downward revisions of previous estimates by 258,000. Following this report, investors adjusted expectations, predicting a Federal Reserve rate cut at the September meeting as job growth concerns overshadow inflation, shifting Fed priorities towards unemployment relief in monetary policy.
The economy grew by 73,000 jobs, according to the Bureau of Labor Statistics. That was less than most economists were forecasting. Worse, the initial estimates for job growth in May and June were revised downward by a total of 258,000.
Friday's disappointing jobs report drove the sharp fall in mortgage rates, as investors now anticipate slower growth and an earlier Fed rate‐cut cycle, said Kara Ng, senior economist for Zillow.
Investors now believe the Federal Reserve will almost certainly cut short-term interest rates at its next meeting ending Sept. 17, according to the CME FedWatch tool.
Until the jobs report came out, the Fed seemed to be more worried about inflation than unemployment. Now investors think unemployment is the villain, and that the central bank will battle it with at least one rate reduction.
Collection
[
|
...
]