Today's Mortgage Rates - 09/07/2024

Steady Start to September

Mortgage rates barely moved this week.

Freddie Mac reported today the average offered interest rate for a conforming 30-year fixed-rate mortgage (FRM) was unchanged, holding at 6.35% and remaining at its lowest level since mid-April 2023.

However, the average offered rate for 15-year fixed-rate mortgages found a little space to decline, easing by four basis points (0.04%) to 5.47% this week. Most commonly used by homeowners who are refinancing existing loans, the average rate for the most prevalent shorter-term mortgage now stands at its lowest level since early February 2023.

A 5/1 ARM might offer a homebuyer slightly lower-cost alternative to a long-term fixed-rate mortgage, but the difference in rate between 30-year FRMs and 5/1 ARMs has not been all that expansive of late. The Mortgage Bankers Association reported that the initial fixed interest rate on a hybrid 5/1 ARM remained steady this week, holding at 5.98%. The 47 basis point difference between the rate for a 30-year FRM and that for a 5/1 ARM is fairly narrow, so an ARM may not be a very compelling choice for a potential homebuyer at present.

Even when the call of ARMs is strong, it's important to remember that ARMs are not a set-it-and-forget-it loan product, and there are potential risks and possible rewards for selecting one. If you're interested in learning the advantages (and drawbacks) of ARMs, you should read HSH's comprehensive Guide to Adjustable Rate Mortgages.

With the Fed recently turning its focus from one solely on inflation to one that also pays more heed to labor conditions, both the central bank and investors are watching inbound data on hiring and firing very carefully. The July Job Openings and Labor Turnover Survey (JOLTS) did find the fewest available positions since early 2021 and an uptick in layoffs, but also an improvement in hiring and fewer folks voluntarily quitting jobs to take new ones. Initial claims for unemployment benefits have also been pretty flat at a low level for several weeks, so even those who mightbe losing jobs don't appear to be having much difficulty in locating new positions, at least as yet.

With this mixed bag as a backdrop, all eyes have turned to Friday's August Employment report for fresh clues. The July report featured hiring rather below forecasts and also saw an increase in the unemployment rate, part of a group of data that helped bond yields and mortgage rates decline measurably.

Depending on that report, mortgage rates could break a little in either direction in the coming days. A moderate-to-strong showing for labor conditions might lift rates slightly, but a weaker-than-expected one could leave rates some space to decline as markets begin to expect a more forceful reaction from the Fed when they meet in less than two weeks.

Each week in HSH's MarketTrends newsletter, we track and discuss economic conditions that affect mortgage rates and their impact on housing markets and consumers. Read the most recent edition of MarketTrends or subscribe for email delivery.