Name: US 30-year Mortgage Rate Drops on Weak Jobs Data, Fed Rate-Cut Signals
Uploaded: 2024-08-09T02:42:33.000Z
Description: The interest rate for the most popular U.S. home loan plunged last week to its lowest level in 15 months, after the Federal Reserve signaled it could start cutting its policy rate in September and a downshift in the job market bolstered financial market bets the reductions in borrowing costs would be big.

Stefania Cox is an NTD News anchor and national correspondent based at the network's global headquarters in New York City. Stefania anchors "NTD Newsroom," and co-anchors "NTD News Today" weekdays at 10:00 am ET.

Stefania Cox

Cary Dunst is the news anchor for NTD Evening News. He is also the co-host of NTD Good Morning.


Cary Dunst

NTD Plus

News

We present news that is truthful and based on facts, outside of the political fog. Instead of focusing on the negative things happening around us, our mission is to give our viewers a good morning with empathetic and uplifting stories. Our aim is to provide an antidote to negativity by shining a light on the best side of people. We speak to inspiring people who positively impact communities, pursue topics that represent our common human values, and will never miss an opportunity to bring you heartwarming stories.

NTD Good Morning

Smart Spending: How to Save on Summer Travel

UAE Suffered More Iranian Missiles Than Israel, Paving Way for Iron Dome: Analyst

NTD Newsroom comprises teams of reporters, editors, and producers assigned to cover breaking news and other stories.


NTD Newsroom

Washington Event to Rededicate US as ‘One Nation Under God’

Best-Selling Author Concerned Christians May Be Next in China’s State-Sanctioned Organ Trade

Jason Perry is an Army veteran and NTD's National Security Correspondent based at the network's global headquarters in New York City. Jason primarily covers border security, national defense, foreign wars, and veterans' issues.

Jason Perry

Pentagon Paves the Way to Buy 10,000 Containerized Missiles

US Reports No Hantavirus Cases From Cruise Outbreak

Juliette Fairley is a freelance reporter for NTD and The Epoch Times and a graduate of Columbia University’s Graduate School of Journalism. Born in Chateauroux, France, and raised outside of Lackland Air Force Base in Texas, Juliette is a well-adjusted military brat. She has written for many publications across the country. Send Juliette story ideas at JulietteFairley@gmail.com

Juliette Fairley

Daniel Monaghan is a reporter for NTD News covering culture, social issues, and education. He holds a BA in Political Science and Government.

Daniel Monaghan

US News

Politics

Executive Branch

Rubio: China is ‘Top Geopolitical Challenge’

The Associated Press is an American not-for-profit news agency headquartered in New York City. 

The Associated Press

Jury Awards $49.5 Million to Family of Woman Killed in 2019 Boeing Max Crash

Andrew Moran has been writing about business, economics, and finance for more than a decade. He is the author of "The War on Cash."

Andrew Moran

China News

Trump Departs China After 2-Day Talks With Xi

Haika Mrema

Medical Plane Crash in New Mexico Mountains Kills 4, Sparks Wildfire

Accommodating, Enabling China’s Regime a Failed Strategy: China Expert

NTD Good Morning Full Broadcast (May 15)

NTD Good Morning Full Broadcast (May 14)

Kevin Hogan is an NTD News data reporter and national correspondent based at the network's global headquarters in New York City. Kevin covers breaking news, as well as U.S. and global current events. He conveys the news through data visualizations and investigates pressing issues.

Kevin Hogan

NTD Good Morning Full Broadcast (May 13)

NTD Good Morning Full Broadcast (May 12)

President Trump Leaves for China Today; Calif. Mayor to Plead Guilty to Acting as CCP Agent | NTD Good Morning (May 12)

NTD Good Morning Full Broadcast (May 8)

NTD Good Morning Full Broadcast (May 7)

NTD Good Morning Full Broadcast (May 6)

NTD Good Morning Full Broadcast (May 5)

Fast, compelling, first-hand news from China. China in Focus airs Monday–Friday at 8 p.m. ET.

China in Focus

China Sends Warships to Pacific Drill as Tensions With Japan Rise

Reuters is a news agency owned by Thomson Reuters. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide writing in 16 languages.

Reuters

2 US Embassy Personnel Assigned to Cartel Case Killed in Car Accident

Gunman Kills 8 Children, Including 7 of His Own, in Louisiana Mass Shooting

Flora Hua is a reporter based at NTD's global headquarters in New York City, where she covers China news, U.S.-China relations, and human rights issues. Flora primarily contributes to NTD's "China in Focus."  

Flora Hua

Trump: Seized Iranian Ship May Have ‘A Gift From China’

Joseph Lord is a congressional reporter for The Epoch Times.


Joseph Lord

Aldgra Fredly is a freelance writer covering U.S. and Asia Pacific news for The Epoch Times.

Aldgra Fredly

Former NYC Mayor Rudy Giuliani Hospitalized in Critical Condition: Spokesman

Wildfires Across Georgia and Florida Have Destroyed Nearly 50 Homes and Are Forcing Evacuations

News you can trust from the U.S. and around the world. Critical information and insight. We cover the stories that others don’t. NTD News Today airs Monday–Friday at 11 a.m. ET.

NTD News Today

US Warns of China Hacks via Routers, Smart Devices

Juliet Song is an international correspondent exclusively covering China news for NTD. She primarily contributes to NTD's "China in Focus," covering U.S.-China relations, the Chinese regime's human rights abuses, and domestic unrest inside China.

Juliet Song

2 Americans Among Suspected Communist Rebels Killed in Clashes With Troops, Philippine Officials Say

Ryan Morgan is a reporter for The Epoch Times focusing on military and foreign affairs. He was previously a news writer for NTD. 


Ryan Morgan

Mari Otsu is NTD's White House correspondent based in Washington. 

Mari Otsu

World News

Middle East

Iran

3 US Warships Fend Off Iranian Attacks, Trump Says Ceasefire Still Holds

Health News

3 Dead in Suspected Hantavirus Outbreak on Cruise Ship in Atlantic Ocean: WHO

The interest rate for the most popular U.S. home loan plunged last week to its lowest level in 15 months, after the Federal Reserve signaled it could start cutting its policy rate in September and a downshift in the job market bolstered financial market bets the reductions in borrowing costs would be big.

The average contract rate on a 30-year fixed-rate mortgage dropped 27 basis points in the week ended Aug. 2, to 6.55 percent, the Mortgage Bankers Association said on Wednesday. That was the lowest rate since May 2023 and the sharpest drop in two years.

The decline gives potential homebuyers some long-hoped-for relief in what has become an increasingly unaffordable housing market in recent years, as home prices and borrowing costs both rose.

That unaffordability was also on display on Wednesday in July's housing sentiment index from Fannie Mae, the government-sponsored mortgage finance company. Only 17 percent of respondents said it was a good time to buy a home, down from 19 percent in June, Fannie Mae said.

Moreover, 35 percent said they would rent their next residence—rather than buy it—the highest share since 2011.

"Right now, it's difficult to tell if this reflects simple buyer fatigue or a greater sense of disenchantment with the market, but we think it could have important implications should the trend continue," Doug Duncan, chief economist at Fannie Mae, said in a statement.
<h2>Refinance Wave</h2>
The drop in interest rates also gives some people who bought homes when rates were higher the option to refinance and reduce payments. The MBA 30-year average rate topped out at 7.9 percent last October.

Refinancing applications rose sharply to the highest level in two years, the MBA said on Wednesday. That helped lift the refinance share of overall loan application volumes to 41.7 percent—the highest level since the week of the Fed's first rate hike in March 2022.

But purchase activity edged up less than 1 percent, constrained by a low inventory of homes for sale that has pushed up prices.

The Fed, whose aggressive inflation-fighting rate-hike campaign in 2022 and 2023 drove borrowing costs to their highest levels in decades, signaled last week that cooling price pressures and a slowing labor market mean a policy rate cut could be on the table as soon as next month. The U.S. central bank has kept its policy rate in the 5.25 percent–5.50 percent range for more than a year.

Two days after the Fed's last policy meeting, the Labor Department's monthly jobs report showed that the U.S. unemployment rate had jumped to 4.3 percent in July and hiring had slowed, raising fears a recession is imminent or perhaps even underway.

The fears set off a slide in equities that reverberated in global markets into Monday, before stocks recovered somewhat on Tuesday. Major U.S. stock indices were trading higher again on Wednesday.

Last week's labor market data also triggered a rally in U.S. Treasuries, lowering their yields—which move inversely to bond prices—and pulling closely linked mortgage rates down along with them, a silver lining for millions of U.S. households on the hunt for new homes, cheaper housing, or both.
<h2>Rate Cuts Coming</h2>
While the Fed left rates steady at its July meeting, its post-meeting policy statement showed it was now just as focused on the health of the labor market as on bringing down inflation.

That shift in communication, San Francisco Fed President Mary Daly said on Monday, has translated to lower mortgage rates as investors anticipate the central bank's next move.

"You already see policy working, even before we cut the rate," she said.

Interest rate futures now reflect bets the Fed will cut its policy rate by a total of a full percentage point by the end of this year, starting with a reduction of half a percentage point next month.

More than 4 million mortgages originated since 2022 have interest rates of 6.5 percent or higher, according to Intercontinental Exchange's ICE Mortgage Monitor.

But more than six in 10 mortgages have rates below 4 percent, according to data from Freddie Mac, the government-sponsored mortgage giant. That suggests that for a large fraction of homeowners mortgage rates would need to drop far more to make the cost of refinancing worthwhile, or to entice them to buy a new home and put their current one on the market.

Latest

Videos

Business News

04_Top Stories

mortgage

Latest Clips

Don Ma is an anchor and senior business correspondent based at the network's global headquarters in New York City. Don is the anchor and producer of NTD's "Business Matters," which airs weekdays at 4:30 pm ET.

Don Ma

Latest and breaking news, documentaries, movies, and lifestyle content on NTD+.
 
Empower your knowledge and elevate your spirit with NTD+, your go-to destination for truthful news, insightful documentaries, and captivating lifestyle content that enriches your life.