Orion and the brokers we work with prides ourselves on service and products, traits that have been reliable over the years. But mortgage rates do enter into the decision making of your clients, and with that in mind our AEs have some good news.

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Rates on30-year mortgages rate fell into the 6’s last week, their lowest levels since February as the bond market reacted to signs of cooling inflation. Of course, specific rates are dependent on the borrower and property, but 30-yearfixed-rate mortgage rates falling is a good thing for your borrowers and are not only lower than a week ago but also a year ago. And this helps buying a home become more affordable.

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Analysts are crunching the numbers, and the data is showing a moderation in home price growth and increasing housing inventory, both positive signs for our broker’s clients. House prices increased 5.7% year-on-year in May, the smallest annual increase in 10 months as still-high mortgage rates then kept a lid on demand, the Federal Housing Finance Agency said Tuesday. Pending home sales surged 4.8%in June from a month earlier, helped by the recent increase in homes for sale, the National Association of Realtors said on Wednesday.

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Orion’s brokers report that some potential buyers and borrowers may be hoping and waiting for mortgage rates to decline even further, which is what may happen once the Federal Reserve begins to cut short-term rates. If inflation continues to cool, the Fed could cut interest rates as soon as September, Chair Jerome Powell said Wednesday.

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On Friday we learned that the job market definitively slowed in July, with nonfarm payroll growth coming in below expectations, the unemployment rate moving up to 4.3%,and wage growth slowing to 3.6%. The weakness in the July numbers certainly support the U.S. Federal Reserve cutting rates, but the next inflation report needs to confirm that price growth is also slowing. The market is moving ahead of the Fed, bringing down longer-term rates including those for mortgages, which should lead to both more home purchases and a pickup in refinance activity.

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So, on Friday mortgage rates fell on the news of weak job growth and rising unemployment. The 4.3% unemployment rate is the highest since coming out of the COVID lockdown and higher than the 3.5% unemployment rate right before theCOVID-19 arrival. The hourly wage gain of 3.2% is the weakest in three years.

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Brokers know that the Fed does not set mortgage rates, but the same factors that influence its activities influence mortgages. Many believe that the Fed may make a deeper cut of 50 basis points in September. The average 30-year fixed mortgage rate looks to fall to 6.5% or even lower in the upcoming weeks. That is what the10-year bond yield suggests, which plunged to 3.8% Friday compared to 4.8% a few months ago. The 100-basis-point change in mortgage rates generally means around a $300 lower payment on a typical mortgage. Homebuyers who were priced out a few months ago can benefit, and the market moves creates a great reason for a broker to call their clients.

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