Is it time to refinance your mortgage? The 30-year fixed rate mortgage (FRM) currently sits at 6.28%, according to Mortgage News Daily, registering the lowest level since October 2024. On Friday, the rate fell by 16 bps following a lackluster nonfarm payrolls update, which was the largest one-day drop since August 2024.
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The weak jobs update caused the 10-year Treasury yield to fall as investors increased their expectations of a 50 bps rate cut at the September 16-17 Federal Open Market Committee (FOMC) meeting. The 30-year FRM closely follows the 10-year yield and fell as well.
Mortgage Rates Near Yearly Lows but Outlook Remains Uncertain
Despite falling rates, many potential homebuyers are still stuck on the sidelines as housing prices remain near all-time highs. On top of that, a rate cut doesn’t guarantee lower mortgage rates. For example, mortgage rates pushed higher after the Fed lowered the federal funds rate last year, tracking the movement of Treasury yields.
While mortgage rates have eased to their lowest level in nearly a year, the outlook remains tied to upcoming economic data and Treasury yields. Much will depend on how the Fed balances rate cuts with labor market and inflation risks and how yields react in the weeks ahead.
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