After reaching a low of 6.11% in early September, the average 30-year fixed mortgage rate has risen to 6.62%, which will likely cause refinancing activity to drop again. According to an analysis of a John Burns Research and Consulting survey by the ResiClub blog, neither the 6.11% rate nor the current rate of 6.62% is enough to encourage homeowners to sell and buy new homes. The survey suggests that a mortgage rate below 5.5% would be needed to unlock the market. Only 13% of homeowners would accept rates between 6.5% and 6.99%, while 47% would accept rates between 5% and 5.5%.
The latest employment reports have come in a bit warmer than expected, with the U.S. unemployment rate falling from 4.3% in July 2024 to 4.1% in September 2024. After rising from the cycle low of 3.4% in April 2023 to 4.3% in July 2024, some analysts were concerned this could signal a sharp labor market slowdown or recession. However, the latest jobs numbers have eased those fears somewhat and placed a little upward pressure on long-term yields, including mortgage rates.
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