Hi everyone,
Friday's jobs report looked like it might give mortgage borrowers a break. For a little while, it did. Then rates turned higher again before the day was over.
If you're waiting for one encouraging headline before making a buying or refinancing decision, that's worth understanding.
The first reaction isn't always the one that lasts
The economy added 29,000 jobs in September, according to Friday's initial estimate. Unemployment was 4.2%. BLS described both as little changed, rather than evidence of a dramatic turn in the job market.
Mortgage News Daily reported that bonds initially improved after the jobs numbers, helping lenders offer slightly lower rates. But those gains faded. The publication pointed to details in the unemployment figures, rebounding oil prices and changing conditions in European bond markets as contributing factors. Lenders raised rates during the day.
The connection is fairly simple: lenders price mortgages partly around what investors will pay for investments backed by home loans. When that market changes, the rate a lender offers can change with it. Tuesday's reporting also showed mortgage bonds and Treasuries weren't moving in exactly the same way.
And hiring wasn't the week's only message. Wednesday's report showed that consumer spending rose 0.6% in August after adjusting for inflation, while the PCE measure of consumer prices was 3.4% above a year earlier. Softer hiring and continued spending can exist at the same time.
Where does that leave the weekly mortgage number? Freddie Mac's October 1 average for a 30-year fixed mortgage was 7.28%, up from 7.03%. That survey covered September 24–30, so it predates Friday's back-and-forth and isn't a quote for today.
What I'd take from this: a promising morning doesn't settle the rate conversation. Before changing your plans, check what the loan actually costs when you're ready to decide.
A price cut isn't the same as a bargain
Realtor.com's September report found that 20.8% of listings had a price reduction, up from a year earlier. That's roughly one in five listings in its data. These are changes to asking prices, not the prices buyers ultimately paid.
A reduction tells you the seller changed the asking price. It doesn't tell you whether the new price is reasonable.
I'd compare recent nearby sales and the homes you could buy instead. For sellers, the same comparison can help you judge whether your asking price makes sense. The size of a discount matters less than where the price ends up—and what the financing makes the monthly payment.
Strategy Corner
Is that lower payment actually a better loan?
When comparing Loan Estimates, look closely at the property-tax and insurance estimates. A lender doesn't control those bills, and a smaller estimate doesn't make the loan cheaper.
Here's a hypothetical: two offers have identical principal-and-interest payments and mortgage insurance, but one estimates taxes and homeowners insurance at $150 less per month. Its displayed payment looks $150 better. That difference alone isn't a saving from the lender.
Ask both lenders to use consistent, realistic estimates for the same property. Then compare the costs that can actually differ: origination charges, required services and lender credits, alongside the rate and cash needed to close. Request updated offers close together; estimates from different days can reflect different markets.
I'd also weigh whether the lender can meet your closing date. The goal is a fair comparison of cost and service, not simply the smallest number on page one.
Want to know what you're actually looking at on a Loan Estimate?
I put together a quick video showing you how to understand and compare your Loan Estimate—so you know which numbers actually matter when you're comparing loan options.
2 things I'm watching this week
October 5–11; times Eastern.
Wednesday, October 7, 2 p.m.: What concerned Fed officials at their last meeting? The September meeting minutes can add detail about their discussion of inflation and employment. This is a record of that meeting, not a new rate decision.
Thursday, October 8: Where does the weekly mortgage average land? Freddie Mac's next survey covers October 1–7, bringing more of the recent market swings into the benchmark.
Jessica Eiroa
Mortgage Loan Officer | NMLS #1380149
Five Star Mortgage | Company NMLS #1756744
📞 702-285-0633
✉️ [email protected]
🌐 eiroahomeloans.com
Educational Disclaimer:
This newsletter is for educational and informational purposes only and is not a commitment to lend. Mortgage rates, programs, terms and availability are subject to change and borrower qualification. This information is not intended as tax, legal or financial advice.
Five Star Mortgage
2629 W. Horizon Ridge Pkwy Suite 140
Henderson, NV 89052