Mortgage rates rose for the third week in a row, pushing the average long-term U.S. home loan rate to its highest level in over 14 months. The benchmark 30-year fixed mortgage rate increased by six basis points last week, according to the Freddie Mac Primary Mortgage Market Survey as of September 10th. Mortgage rates are influenced by several factors, including inflation, broader policy rate decisions from the Federal Reserve and expectations from bond market investors for the economy. Both mortgage rates and bond yields have been mostly rising this year due to the U.S. war with Iran, which has pushed oil prices sharply higher. That’s led to heightened worries about inflation, which drives up bond yields.
Mortgage applications decreased 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending September 4th. “Mortgage rates moved higher last week, driven by ongoing investor concerns over inflation and the federal budget deficit. The 30-year fixed rate increased to its highest point since June 2025” said Joel Kan, CMB, MBA’s Vice President and Deputy Chief Economist. Purchase applications overall were little changed from last week, but more borrowers have shifted to using ARM loans. Higher mortgage rates continue to weigh on prospective homebuyers looking to act, even as housing inventory has increased in many markets.”
U.S. job growth accelerated sharply in August while the unemployment rate held steady at 4.1%, suggesting an improvement in the labor market after recent struggles, keeping an interest rate increase from the Federal Reserve this month on the table. The larger-than-expected increase in nonfarm payrolls last month reported by the Labor Department in its closely watched employment report last Friday reflected a rebound in leisure and hospitality employment after two straight monthly declines, as well as a reversal of the drag from local government education. “The American labor market is in good condition heading into the end of the year,” said Joe Brusuelas, chief economist at RSM. “The data does lend support to the hawks at the Fed who are growing impatient with inflation.”
Slightly fewer Americans filed for unemployment claims last week as jobless claims remain at historically low levels and layoffs are still relatively rare. Filings for benefits dipped to 206,000 last week from a revised 207,000 the week before, the Labor Department reported Thursday. The four-week average of claims, which smooths out week-to-week volatility, also fell modestly to 206,000. Claims for jobless benefits are a proxy for layoffs, and economists watch them because they can be a sign of where the job market is headed. For the past year, claims have mostly stayed within a historically low range of 200,000 to 230,000 a week. The American job market has remained sturdy despite higher gasoline prices that have squeezed businesses and consumers since the fighting with Iran began Feb. 28.
