Today was yet another good day for mortgage rates, which came down an additional 10 bps (0.10%), per the latest daily survey from Mortgage News Daily.
The 30-year fixed now sits at around 6.625%, which is the lowest level seen since early October.
It’s down from around 7.25% in mid-January, representing an improvement of roughly 5/8 of a percentage point.
However, they remain about a half-point above levels seen in early September so there could be more room to fall.
The big question is will they keep falling, and how might they achieve that with a trade war now in effect and a looming budget proposal that could raise the debt ceiling considerably?
Mortgage Rates Are Now at Five-Month Lows
As noted, the 30-year fixed hasn’t been lower since early October, per MND, and it could be poised for even more improvement in coming days, weeks, and months.
Interestingly, mortgage rates are basically back to where they were around the time Trump became the clear frontrunner to win the presidential election.
In a sense, one could argue that the increase in rates driven by an expected Trump victory has simply been unwound.
After all, they appeared to rise quite a bit on the expectation his policies would be inflationary.
We’re only back to where we started. So those rooting on Trump and his Treasury Secretary Scott Bessent should keep that in mind.
Rates moved a lot higher around the time of the election and into the inauguration, before retreating once he took office.
Yes, they’ve improved a lot over the past few weeks, but have only really gotten us back to square one.
Now the rubber meets the road and we find out if this “plan” to lower interest rates is actually feasible.
Keep an Eye on Jobs Data This Week for Direction
The biggest factors this week, and there are several, will be the many jobs-related reports released.
We get ADP employment tomorrow, initial jobless claims on Thursday, and the most important Bureau of Labor Statistics (BLS) jobs report on Friday.
They all matter, but the jobs report on Friday will matter most. The Fed has been paying close attention to employment lately, which is the other part of their dual mandate along with price stability.
Inflation seems to be a lot better, so all eyes will be on employment, which has all of sudden looked very shaky.
The mass and seemingly impulsive government layoffs have added fuel to the fire, putting the entire state of the economy in question.
And despite a trade war that has ramped up, with new tariffs on Canada, China, and Mexico in effect, it appears jobs remain in the driver’s seat.
Long story short, another weak jobs report will likely lead to a continued stock market selloff, which should strengthen the recent flight to safety in bonds.
If bonds continue to see stronger demand, their yields fall, and so do interest rates on mortgages.
This has been the case for a month and a half now, with the bellwether 10-year bond yield falling from 4.79 to 4.17 since then.
Some are anticipating a drop back in the 3s for the 10-year, which would push mortgage rates even lower.
A Weak Jobs Report Could Get Us Back to September Lows
As I said, mortgage rates are basically back to where they were before it became clear Trump was winning the election.
But right before that, rates jumped higher due to a hotter-than-expected jobs report released on October 4th.
Nonfarm payrolls surged by 254,000 last September as the unemployment rate fell from 4.2% to 4.1% and wages rose 0.4%.
That pushed the 30-year fixed up about a quarter-percent in a single day from around 6.25% to 6.50%!
Prior to the jobs report, it appeared the 30-year fixed was destined to hit the 5% range. That didn’t go as planned, and instead rates climbed above 7%.
Which begs the question, will this time be different or will the mortgage rate rally be stopped in its tracks yet again?
If jobs data does come in weak (as many expect), mortgage rates could return to the 5s eventually, which would mark more than two-year lows not seen since February 2023.
Nobody knows for certain what will happen, but this week could be very telling for where mortgage rates go next. So be sure to pay close attention if you’re in the market.
Also be wary of a looming government shutdown on March 15th, which could create further chaos.
And if you’re pondering whether to lock or float, know that volatility could be high this week and next as the new administration attempts to bring down rates without breaking anything.
Read on: 2025 Mortgage Rate Predictions
(photo: Michael Coghlan)
Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.
