As hard as they try, mortgage rates keep hovering around the 7% level.
It appears any time progress is made, they climb right back to 7%, or very close to it.
After the jobs report on Friday was a tad hotter than expected, they turned higher after what was looking like a winning week.
At last glance, they made their way to 6.97%, just shy of 7%, per Mortgage News Daily.
They’re having a difficult time getting away from those levels, though relief could still come later in the year.
Jobs Report Pushes Mortgage Rates Back Toward 7%
It wasn’t necessarily a hot jobs report, but it still beat expectations.
Some 139,000 nonfarm payrolls were added in May, well below April’s levels, but more than the 126,000 expected.
At the same time, there were revisions for the April and March numbers.
It makes you wonder if May will be revised too, but in the meantime bond traders took it as a cue to sell.
The 10-year bond yield went up as a result and the 30-year fixed followed.
After it appeared mortgage rates were trending down again, they were right back by 7% again.
The culprit has been steady enough employment, rising wages, and the thought that the Fed will push back rate cuts.
While the Fed doesn’t set mortgage rates, bond traders pay attention to their monetary policy.
As such, rates are higher and may stay that way for longer.
First Fed Rate Cut Not Until December?
Now some analysts don’t expect a Fed rate cut until December, which makes you wonder if we’ll even see any at all in 2025.
There were previous forecasts of three or more cuts this year.
Driving the change is a supposed resilient economy, at least according to the data.
And the thought that inflation could pick up again as the tariff impact becomes more clear.
Taken together, it makes it difficult to foresee any big moves lower for interest rates.
Of course, the data can change, and the sentiment on the street isn’t as rosy.
Talk to your average American and they’ll likely paint a more pessimistic picture.
But until the data backs that up, it might be higher for longer.
And given it’s already June, the spring home buying season has come and gone.
It’s looking like another lackluster year for home sales similar to 2024.
When that dynamic finally changes is becoming more uncertain.
But so far it’s another painful year for real estate agents, loan officers, and of course, prospective home buyers.
Not to mention recent home buyers who may have been banking on a quick refinance to lower their rate.
However, despite the near-term outlook for mortgage rates, there’s still another half a year left in 2025.
And plenty can change mortgage rate-wise.
That could give affordability a much needed boost and also make more refinance applications pencil.
But unfortunately patience is the name of the game right now.
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