Author: Eric BernsteinPublished:
Last week was a gut punch for those hoping to see rates continue to fall. Every jobs report last week was better than the last, culminating with a shocking employment report that sent mortgage rates much higher!
All of the sudden we went from analysts predicting a recession to analysts saying we are now in a strong economy. It's enough to give you whiplash!
The average rate on a 30-year fixed rate conventional loan soared to 6.28% (up from 6.06 last week)! Sign up for our weekly Friday rate texts to see how much lower our rates are compared to the average! Below average rates with above average customer service could be a great new motto for LendFriend!😂
Job Market Reporting Stunned Everyone
Just a month ago everyone was talking about how cold the job market felt. People were being laid off, hiring was slow, job openings were falling and very few jobs were being added to the economy. This week everything apparently changed. Here are the highlights:
Job openings climbed back above 8 million (up from 7.7M a month ago and better than the 7.7M expected in this report). However, actual hirings averaged just 116,000 net new jobs a month from June through August — the weakest three-month average since mid-2020.
All of the sudden we went from analysts predicting a recession to analysts saying we are now in a strong economy. It's enough to give you whiplash!
The average rate on a 30-year fixed rate conventional loan soared to 6.28% (up from 6.06 last week)! Sign up for our weekly Friday rate texts to see how much lower our rates are compared to the average! Below average rates with above average customer service could be a great new motto for LendFriend!😂
Job Market Reporting Stunned Everyone
Just a month ago everyone was talking about how cold the job market felt. People were being laid off, hiring was slow, job openings were falling and very few jobs were being added to the economy. This week everything apparently changed. Here are the highlights:
Job openings climbed back above 8 million (up from 7.7M a month ago and better than the 7.7M expected in this report). However, actual hirings averaged just 116,000 net new jobs a month from June through August — the weakest three-month average since mid-2020.
Private payrolls increased by 143,000 jobs last month after rising 103,000 in August (better than the 120,000 expected). Hiring was led by construction and hospitality and leisure - likely thanks to the fall in rates.
And the biggest surprise.... The jobs report showed that the U.S. added 254,000 jobs in September, far exceeding the 150,000 expected. The unemployment rate fell AGAIN from 4.2% in August to 4.1%.
This jobs reporting week gave me flashbacks to January 2024 - a time where many thought we were about to see 6 rate cuts in 2024 but instead we saw inflation tick higher, the labor market heat up and interest rates head back above 7%!
Hopefully this isn't the start of the same events we saw at the beginning of 2024. After all, it's important to remember that in August the Bureau of Labor Statistics needed to issue a statement that there were actually 818,000 fewer jobs in March of this year than were initially reported. How many of the jobs reported last week are we going to find out weren't actually created?
This is just another perfect example of how no one can truly predict what's going to happen with interest rates and how so many people can miss out on great homebuying opportunities waiting for rates to fall. Remember what the market thinks the Fed will do is often times more important than what the Fed does.
FED 2ND RATE CUT WATCH
Former Treasury Secretary Larry Summers said the Federal Reserve’s decision to cut interest rates last month was a mistake after new data showed that US job growth last month topped all estimates.
Austan Goolsbee was on TV after the Friday jobs report and called it "superb". However, he also said he believes that the labor market is still cooling. Goolsbee said, it is appropriate for the Fed to continue to cut rates "a lot" over the next 12 to 18 months, as most of its policymakers currently expect. Unfortunately, Goolsbee is one of the biggest advocates for rate cuts. I'm eager to hear what the more "anti-rate cut" Fed members are going to say this week
It seems that before the first rate cut the market was WILDLY overenthusiastic about just how many rate cuts we'd be getting despite what the Fed has been saying. Since the first rate cut and after last week's jobs reporting, the market appears to be coming back to reality and now expects a 25bp rate cut in November and 25bp rate cut in December. Current mortgage rates reflect that expectation.
Fingers crossed that we have some good CPI numbers this week to get us back on track! 🤞🤞🤞
In other news -
The port workers strike has been delayed until January 15, 2025 to give the parties time to reach a settlement. Automation remains one of the key points of contention that is left to be negotiated. To put it nicely, the US ports are laggards on automation compared to the rest of the world. China's ports pretty much run on AI. We'll see if a deal can get done, but pushing back the strike is good news for inflation concerns.
Hopefully this isn't the start of the same events we saw at the beginning of 2024. After all, it's important to remember that in August the Bureau of Labor Statistics needed to issue a statement that there were actually 818,000 fewer jobs in March of this year than were initially reported. How many of the jobs reported last week are we going to find out weren't actually created?
This is just another perfect example of how no one can truly predict what's going to happen with interest rates and how so many people can miss out on great homebuying opportunities waiting for rates to fall. Remember what the market thinks the Fed will do is often times more important than what the Fed does.
FED 2ND RATE CUT WATCH
Former Treasury Secretary Larry Summers said the Federal Reserve’s decision to cut interest rates last month was a mistake after new data showed that US job growth last month topped all estimates.
Austan Goolsbee was on TV after the Friday jobs report and called it "superb". However, he also said he believes that the labor market is still cooling. Goolsbee said, it is appropriate for the Fed to continue to cut rates "a lot" over the next 12 to 18 months, as most of its policymakers currently expect. Unfortunately, Goolsbee is one of the biggest advocates for rate cuts. I'm eager to hear what the more "anti-rate cut" Fed members are going to say this week
It seems that before the first rate cut the market was WILDLY overenthusiastic about just how many rate cuts we'd be getting despite what the Fed has been saying. Since the first rate cut and after last week's jobs reporting, the market appears to be coming back to reality and now expects a 25bp rate cut in November and 25bp rate cut in December. Current mortgage rates reflect that expectation.
Fingers crossed that we have some good CPI numbers this week to get us back on track! 🤞🤞🤞
In other news -
The port workers strike has been delayed until January 15, 2025 to give the parties time to reach a settlement. Automation remains one of the key points of contention that is left to be negotiated. To put it nicely, the US ports are laggards on automation compared to the rest of the world. China's ports pretty much run on AI. We'll see if a deal can get done, but pushing back the strike is good news for inflation concerns.
Unique Product Highlights -
As a reminder, here's a highlight of some of our more unique loan products that may be able to help you. If you want more information, click the links for more information or send me an email!
Buy before you sell - giving current homeowners the opportunity to tap into their current home's equity to buy their new house without having to sell their current house. Removes the stress of trying to coordinate the perfect transaction or double moves.
Home Loans For Entrepreneurs and Business Owners - Streamlined and easy loan process for people who aren't W2 employees. No tax returns required. Just bank statements and you won't be buried in paperwork!
Home Loans For Retirees - So many retirees worry they have to rent for life if they move because they'll never qualify for a mortgage. This loan program dispels those myths. We can easily qualify you and help you buy a home wherever you want.
Key reporting dates this week:
Mon, 10/7: Federal Reserve Governor Michelle Bowman speaks, Consumer credit
Tues, 10/8: U.S. trade deficit ,Atlanta Fed President Raphael Bostic speaks
Wed, 10/9: Minutes of Fed's September FOMC meeting,
Thurs, 10/10: Initial jobless claims, CPI, Core CPI
Fri, 10/11: PPI, Core PPI
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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.