Rates Just Dropped To Their 2^nd Lowest Levels In Two Years

Mortgage rates have taken a welcome dip, giving both homeowners and buyers an opportunity to act before the market heats up again.

Why Rates Dropped

The Bureau of Labor Statistics (BLS) recently released its July jobs report, which came in much weaker than expected. But what really moved the market were the significant downward revisions to previous months’ job numbers (-258K revisions combined for May and June). This suggests that the labor market may not be as strong as originally reported.

Each month, the BLS initially reports job growth figures, but the prior two months are also often revised as well as more comprehensive data becomes available. For example, May and June’s job growth figures were sharply reduced in the latest update.

You can see this in the chart below, where blue bars represent the revised job numbers and gray bars show the month’s prior unrevised figures. These revisions signal slowing job growth and have contributed to easing inflation concerns, which in turn has led to lower mortgage rates.

What This Means for Homebuyers

Lower rates increase purchasing power, which can make a noticeable difference in monthly payments. When rates drop, more buyers tend to re-enter the market, creating more competition for homes. According to the National Association of Realtors, they predict a 30-year fixed rate mortgage of 6% would make the median-priced home affordable for about 5.5 million more households. Acting now means you can lock in a lower rate and potentially face fewer bidding wars before competition picks up.

Example:
A $750,000 loan at 6.0% vs. 7.0% saves roughly $493 per month. That’s more than $177,000 in interest savings over the life of a 30-year loan.

Why Homeowners Should Consider Refinancing

If your current mortgage rate is higher than today’s market rates, refinancing could reduce your monthly payment or help you pay off your mortgage faster. It can also be a way to tap into your home’s equity for renovations, debt consolidation, or other financial goals.

While many projections suggest rates could drift lower over time, there is no guarantee if and when they will begin to lower. The past two years of rate movement show how unpredictable the market can be, with sudden spikes and dips. Factors like a resurgence of inflation, possibly driven by higher costs from new tariffs, could quickly push rates higher again.

Act Before the Markets React

Lower rates are like a green light for sidelined buyers, which means competition can pick up quickly. As more people enter the market, inventory moves faster and sellers have less incentive to negotiate.

If a refinance or purchase makes financial sense for you today, it may be worth acting now. Locking in a lower rate can deliver immediate monthly savings and help you reduce interest costs right away, rather than waiting and risking a rebound in rates.

To prepare for the possibility of rates dropping further, reach out and begin an application with us. This allows us to create a “strike rate” plan so we can act immediately if the market moves in your favor. Having this strategy in place ensures you do not miss the opportunity to secure the best rate available.