- Mortgage rates fell significantly last week, declining 15 basis points according to the Freddie Mac Primary Mortgage Market Survey released September 11th. This is the largest weekly drop in the past year. Mortgage rates are headed in the right direction, and homebuyers have noticed, as purchase applications reached the highest year-over-year growth rate in more than four years.
- Mortgage applications increased 9.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 5th. “Mortgage rates declined for the second consecutive week as Treasury yields moved lower on data indicating that the labor market is weakening. The 30-year fixed rate was down 20 basis points over the past two weeks to the lowest since October 2024,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “The downward rate movement spurred the strongest week of borrower demand since 2022, with both purchase and refinance applications moving higher. Purchase applications increased to the highest level since July and continued to run more than 20 percent ahead of last year’s pace. Refinance applications accounted for almost 49 percent of all applications last week.”
- The Labor Department on Tuesday published the preliminary estimate of its annual benchmark revision to nonfarm payrolls, which showed the U.S. economy added significantly fewer jobs than previously reported. The Bureau of Labor Statistics (BLS) published its first estimate of the annual benchmark revision, which lowered its estimate of employment by about 911,000 jobs over the April 2024 to March 2025 period. LPL chief economist Jeffrey Roach noted that the benchmark revision pulled down average monthly jobs gains over the April 2024 to March 2025 period from 147,000 to 71,000. “The labor market appears weaker than originally reported. A deteriorating labor market will allow the Fed to highlight the need to ease rates. Investors should expect the Fed to officially start the rate-cutting campaign at the next meeting. Solid household wealth is keeping the middle and upper-income consumer afloat but has the economy in an a-typical business cycle,” Roach explained.
- Prices consumers pay for a variety of goods and services moved higher than expected in August. The consumer price index posted a seasonally adjusted 0.4% increase for the month, the biggest gain since January, putting the annual inflation rate at 2.9%, up 0.2 percentage points from the prior month and the highest reading since January. For the vital core reading that excludes food and energy, the August gain was 0.3%, putting the 12-month figure at 3.1%, both as forecast. Fed officials consider core to be a better gauge of long-run trends. The central bank’s inflation target is 2%. According to Seema Shah, chief global strategist at Principal Asset Management. “While the CPI report is a tad hotter than expected, it will not give the Fed a moment of hesitation when they announce a rate cut next week. If anything, the jump in jobless claims will inject a bit more urgency in the Fed’s decision making, with Powell likely signaling a sequence of rate cuts is on the way”.
