Author: Eric BernsteinPublished:
Last week was another stable week for rates. Trump called off the dogs on the Mexico and Canada tariffs (at least for the next month to see if there's progress on bolstered border security). While news in the first half of the week had rates falling, it was unfortunately largely outweighed by the Jobs Report on Friday, which had rates giving up most of the positive moment.
Rates still dipped slightly on the week. The average rate on a 30-year fixed rate conventional loan dipped to 6.79% (from 6.84%). Sign up for our weekly Friday rate texts to stay in the know on where rates are week by week! It's a must for anyone planning to buy or refinance in 2025!
The Unexpected US Debt Issuance
Shockingly - the Trump's US Treasury stuck with the Biden Era approach to sales of longer-term debt by deciding to keep the policy unchanged well into 2025. This was GREAT news for mortgage rates, as many expected Bessent (the new US Treasury Secretary) was repeatedly charged Yellen with having artificially held down sales of longer-maturity Treasuries — which affect things like mortgage rates — to boost the pre-election economy. Many expected Bessent to issue more debt as soon as he took the helm, and the surprise that he held off had mortgage rates falling. We'll see how long Bessent will keep the Biden Era approach in place, but when he does eventually change course, mortgage rates are expected to rise slightly.
JOBS JOBS JOBS
Last week was jobs week and we all know how important those are for mortgage rates. A worse than expected reporting week usually means rates will plummet. A better than expected reporting week (like we saw last month) sends rates higher.
More jobs = More problems for mortgage rates
The good news is that rates didn't go higher. The bad news is that they didn't go lower either. Let's look at why.
Job Openings drop 556,000 to 7.6M in December (much lower than the 8M expected), making it the largest one month decline in job openings since October 2023! Also important to note that job-hopping is becoming less of a trend. The number of people voluntarily quitting their jobs rose by only 67,000 to 3.197 million, keeping the quits rate at 2.0%. The quits rate is viewed as a measure of labor market confidence, and the steady reading points to low wage inflation. Overall, a nice sign start to the week.
Then we saw private payrolls beat expectations (183k jobs actual vs 150k expected). All of the job creation came from service providers, who added 190,000 positions while goods producers lost 6,000, which isn't a great sign for the state of the manufacturing industry.
Finally the Bureau of Labor Statistics released the January Jobs Report on Friday, and there was mixed messaging - overall, it was a negative for homebuyers. Hiring slowed in January as U.S. employers added 143,000 jobs (vs169k expected), but something unusual happened - payrolls were actually revised UPWARD by 100k over the last 2 months, which depicts the labor market at the end of 2024 as more robust than previously expected. PLUS, the unemployment rate FELL again to 4.0%. We want to see unemployment trend up towards 5% to give the Fed more confidence that the labor market has cooled.
There is one BIG employer in the US that can reek havoc on future employment numbers and that's the US government. In 2024, the US government added 38,000 jobs a month on average! Trump, Musk and DOGE are on a crusade to change that. Not only are they not interested in hiring more, they are actively looking to layoff existing staffers. As of last Thursday, at least 65,000 federal workers had opted in to the deferred resignation program that Musk emailed out to over 2 million federal workers, and this is likely just the beginning. We'll see what DOGE's effects on government and nationwide employment as it continues to attempt to cut costs throughout the federal government.
Rate Cut Predictions
The market is still targeting June 18th! With inflation news coming out this week and Powell testifying in front of Congress, it's another week with some BIG potential for mortgages (as I'm sure you're all sick of hearing by now).
Rates still dipped slightly on the week. The average rate on a 30-year fixed rate conventional loan dipped to 6.79% (from 6.84%). Sign up for our weekly Friday rate texts to stay in the know on where rates are week by week! It's a must for anyone planning to buy or refinance in 2025!
The Unexpected US Debt Issuance
Shockingly - the Trump's US Treasury stuck with the Biden Era approach to sales of longer-term debt by deciding to keep the policy unchanged well into 2025. This was GREAT news for mortgage rates, as many expected Bessent (the new US Treasury Secretary) was repeatedly charged Yellen with having artificially held down sales of longer-maturity Treasuries — which affect things like mortgage rates — to boost the pre-election economy. Many expected Bessent to issue more debt as soon as he took the helm, and the surprise that he held off had mortgage rates falling. We'll see how long Bessent will keep the Biden Era approach in place, but when he does eventually change course, mortgage rates are expected to rise slightly.
JOBS JOBS JOBS
Last week was jobs week and we all know how important those are for mortgage rates. A worse than expected reporting week usually means rates will plummet. A better than expected reporting week (like we saw last month) sends rates higher.
More jobs = More problems for mortgage rates
The good news is that rates didn't go higher. The bad news is that they didn't go lower either. Let's look at why.
Job Openings drop 556,000 to 7.6M in December (much lower than the 8M expected), making it the largest one month decline in job openings since October 2023! Also important to note that job-hopping is becoming less of a trend. The number of people voluntarily quitting their jobs rose by only 67,000 to 3.197 million, keeping the quits rate at 2.0%. The quits rate is viewed as a measure of labor market confidence, and the steady reading points to low wage inflation. Overall, a nice sign start to the week.
Then we saw private payrolls beat expectations (183k jobs actual vs 150k expected). All of the job creation came from service providers, who added 190,000 positions while goods producers lost 6,000, which isn't a great sign for the state of the manufacturing industry.
Finally the Bureau of Labor Statistics released the January Jobs Report on Friday, and there was mixed messaging - overall, it was a negative for homebuyers. Hiring slowed in January as U.S. employers added 143,000 jobs (vs169k expected), but something unusual happened - payrolls were actually revised UPWARD by 100k over the last 2 months, which depicts the labor market at the end of 2024 as more robust than previously expected. PLUS, the unemployment rate FELL again to 4.0%. We want to see unemployment trend up towards 5% to give the Fed more confidence that the labor market has cooled.
There is one BIG employer in the US that can reek havoc on future employment numbers and that's the US government. In 2024, the US government added 38,000 jobs a month on average! Trump, Musk and DOGE are on a crusade to change that. Not only are they not interested in hiring more, they are actively looking to layoff existing staffers. As of last Thursday, at least 65,000 federal workers had opted in to the deferred resignation program that Musk emailed out to over 2 million federal workers, and this is likely just the beginning. We'll see what DOGE's effects on government and nationwide employment as it continues to attempt to cut costs throughout the federal government.
Rate Cut Predictions
The market is still targeting June 18th! With inflation news coming out this week and Powell testifying in front of Congress, it's another week with some BIG potential for mortgages (as I'm sure you're all sick of hearing by now).
Key reporting dates this week:
Mon, 2/10: None scheduled
Tues, 2/11: NFIB optimism index, Fed members speaking
Wed, 2/12: Consumer price index, Core CPI, Fed Chairman Jerome Powell testifies to Congress
Thurs, 2/13: Initial jobless claims, Producer price index, Core PPI
Fri, 2/14: Import price index, U.S. retail sales, Retail sales minus autos
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About the Author:
Eric Bernstein is the President and Co-Founder of LendFriend Mortgage, where he helps homebuyers make smarter, more confident decisions in today’s fast-moving housing market. With over a decade of experience guiding hundreds of clients—from first-time buyers to seasoned investors—Eric brings a mix of market insight, strategy, and personalized service to every mortgage transaction. Each week, Eric breaks down the housing and economic headlines that matter, giving readers a clear, no-fluff view of what’s happening and how it might impact their buying power.