In this weekly market update, Jordan Keck explains the recent decline in mortgage rates from 6.5% to 6.29%, attributing the move to mortgage‑coupon mechanics and a series of weak employment reports. He outlines the Federal Reserve’s likely rate‑cut trajectory (a 100% chance of a 25‑basis‑point cut on Sept 17 and a 70% chance of another in October) and connects these expectations to the softer jobs data. Keck then provides actionable advice for both prospective homebuyers—encouraging fence‑sitters to act while rates and prices soften—and existing homeowners, recommending refinancing or equity pull‑outs for those who locked in higher rates. The bulk of the segment reviews the latest labor market numbers: BLS August jobs (+22k vs. 75k expected), a break in a 54‑month streak of positive job reports, ADP (+54k), rising initial jobless claims, a slight dip in continuing claims, an increase in the broader U6 unemployment rate to 8.1%, and a decline in JOLTS job openings and hiring rates. Keck ties these data points to the Fed’s anticipated policy response and concludes with a call to action for buyers and refinancers.
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Good morning and happy Friday. Jordan Keck, your lender buddy, with your weekly market update. Kicking off with some great news. Interest rates dropping pretty significantly here week over week from 6.5% even to 6.29%. And biggest one on that, kind of moving right into our weekly mortgage tip about rates coming down here, how to prepare. Why they're dropping so much. Part of the reason to do with that— getting a little bit nerdy here, I won't go too far. If you're curious, touch base and I can give you some more info— but has to do with mortgage coupons. So coupons will go in batches of certain interest rates that'll fall into that coupon. And so for a while there, about 6.625% was the lowest rate for the last coupon. But as rates start coming down, they'll hold on to that until the next one is more beneficial, which is 6.125%. We just switched over to that coupon with the market changes. So we're gonna see a lot more in the low 6s for those interest rates as a result. Now, a lot of this comes from the result of the lower jobs report we're gonna be talking about here this week. Federal Reserve is basically a 100% chance they're gonna drop interest rates a quarter this month at their September 17th meeting. There's also pricing in a 70% chance of them dropping again next month in their October meeting as a result of these weak job reports. So it's because of that, how you prepare for this year with your clients, really getting them to understand the market is anticipating those rate cuts already. So because of that, the rates are lower now for mortgages. Don't wait until those are happening. That may or may not fully reflect where things go. So if you have clients that wanted to get off the fence, we're seeing some prices softening, interest rates come down. This may be the moment they were waiting for to get into a home before prices go up, but interest rates are dropping at the same time. Also, as far as refinancing goes, if clients have decided they want to stay in the property, great time to reach out, let them know, hey, this is probably the moment to refinance, maybe pull some equity out of your property if you want to consolidate debts. The moment that we've been waiting for, for probably 3 years for rates to come down. Finally doing that. So clients who bought over the last few years in the high 6s or 7s, this is now a good time to refinance. Next up, as far as some of the data this report— why we— this data this week on why we were dropping rates is pretty much weak job reports across the board. Starting off, we had the BLS jobs report for August showing 22,000 jobs created, well below the 75,000 that was expected. You had even more weakness for the prior 2 months' revised a negative 21,000, with June going from a positive 14 to a negative 13. And this breaks a 54-month streak of positive job report numbers, being the first negative jobs report number in 54 months. The household survey, which is where the unemployment rate comes from, showed 288,000 job gains, but the labor force increase was 436,000. As a result of that, showed the unemployment rate moving from 4.2 to 4.3%. ADP's employment report also showed just 54,000 job gains with a 75,000 expectation. And the average job growth for this report over the last 3 months is now down to 46,000, significantly below the 6-month average of 62,000 and the 12-month average of 120,000 over the last year. So really, really lower there. We showed income for job stayers, those who stayed at the same job year over year, it's at 4.4%, so their income's 4.4% higher, the decrease in the previous report at 4.5%. And then those who changed jobs saw a 7.1% increase in income year over year, which is the same as the previous report. Initial jobless claims rose 8,000 to 237,000. The continuing claims fell 4,000 to 1.94 million, still very, very close to that maximum there. As we've talked about in previous reports and previous updates, the continuing claims number is for people who are still on unemployment claims. Those who have dropped off aren't counted in the unemployment rate anymore, and benefits typically expire after 26 weeks whether or not they get a job or not. So when you look at the all-in unemployment rate, which continues to count those people who have dropped off of benefits but still haven't found a job, the U6 unemployment rate, that moved up from 7.9% to 8.1% the highest level in almost 4 years if you look at really the more accurate measure of true unemployment. The JOLTS job openings jobs report fell 176,000 to 7.18 million, just 219,000 below estimates of an increase in this report. But the previous month was also revised lower by 80,000, and hiring remained very low at only 3.3%, which is the second lowest since 2013 when removing COVID. And the quit rate remained low at 2%, showing that employers are trying to hold onto those that they've got. When somebody leaves, it's much, much harder to be able to get into a job. And because of that data this week of jobs reports, why we saw that big move lower in interest rates. The Federal Reserve seeing these numbers as well, more likely to cut interest rates over time. So again, hopefully this helps get some buyers off of the fence and moving on those properties. As always, hopefully this is helpful. Have a great weekend. We'll see you next time. Take care.
