The Federal Reserve’s decision to lower interest rates in September gave the housing market a nice boost to end the summer. We saw double-digit increases in new and active listings, along with slight growth in median home prices, signaling a bit more balance between the strong seller’s market and rising buyer confidence.
Mortgage rates, however, have ticked up slightly, now sitting in the mid-6% range for a typical 30-year fixed loan (up about 0.5%). Why the slight increase? Unfortunately, rates don’t always go down in a straight line—they fluctuate as the market reacts to new data and external factors.
A big factor was last Friday’s jobs report from the Bureau of Labor Statistics, which showed unemployment dropping from 4.2% to 4%. While good news for the job market, it wasn’t well received by investors. A stronger labor market suggests the Federal Reserve will be slower in cutting short-term interest rates, which caused mortgage rates to rise by about 0.25% to 0.5% since the end of September.
While mortgage rates might be a bit unpredictable and fluctuate in the near future, the good news is they’re expected to gradually come down over time, with the Federal Reserve likely to keep lowering short-term rates.