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    Mortgage rates see biggest one-day drop in over a year

    • September 6, 2025
    • admin

    The average rate on the 30-year fixed mortgage dropped 16 basis points to 6.29% Friday, according to Mortgage News Daily, following the release of a weaker-than-expected August employment report.

    It’s the lowest rate since Oct. 3 and the biggest one-day drop since August 2024. Rates are finally breaking out of the high 6% range, where they’ve been stuck for months.

    “This was a pretty straightforward reaction to a hotly anticipated jobs report,” said Mortgage News Daily Chief Operating Officer Matt Graham. “It’s a good reminder that the market gets to decide what matters in terms of economic data, and the bond market has a clear voting record that suggests the jobs report is always the biggest potential source of volatility for rates.”

    Graham said in a post on X that many lenders are “priced better” than Oct. 3 and would be quoting in the high 5% range.

    The drop is a major change from May, when the rate on the 30-year fixed peaked at 7.08%. It’s big for buyers out shopping for a home today, especially given high home prices.

    Take, for example, someone purchasing a $450,000 home, which is just above August’s national median price, using a 30-year fixed mortgage with a 20% down payment. Not including taxes or insurance, the monthly payment at 7% would be $2,395. At 6.29%, that payment would be $2,226, a difference of $169 per month.

    That might not sound like a lot to some, but it can mean the difference in not just affording a home, but qualifying for a mortgage.

    Homebuilder stocks reacted favorably Friday, with names like Lennar, DR Horton and Pulte all up roughly 3% midday. Homebuilding ETF ITB has been running hot for the last month as rates slowly moved lower. It’s up close to 13% in the past month.

    The big question is whether the drop in rates will be enough to get homebuyers back in the market.

    Mortgage demand from homebuyers, an early indicator, have yet to respond to gradually improving rates. Applications for a mortgage to purchase a home last week were 6.6% lower from four weeks before, according to the Mortgage Bankers Association.

    “Homebuyers grapple with a lack of affordability, sellers contend with more competition, and builders deal with lower buyer demand,” Danielle Hale, chief economist at Realtor.com, said Friday in a statement after the release of the August employment report. “These conditions haven’t spelled catastrophe, but have created a cruel summer for the housing market.”

    Some analysts have argued that buyers need to see mortgage rates in the 5% range before it really makes a difference. Home prices remain stubbornly high, and while the gains have definitely cooled, they are not yet coming down on a national level. In addition, uncertainty about the state of the economy and the job market has left many would-be buyers on the sidelines.

    This post appeared first on NBC NEWS

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      Popular Topics
      • Editor’s Picks: Gold Sets New Price Record, Silver Hits 14 Year High
      • Mortgage rates see biggest one-day drop in over a year
      • New Found Gold and Maritime Enter into Definitive Agreement to Combine; Combination Creates an Emerging Canadian Gold Producer
      • Paramount mandates 5-day-a-week return to office ahead of major cost cuts
      • Allied Critical Metals Intersects 12 Metres of 4.27% TungstenIncl. 6 Metres of 8.39% Tungstenat Its 100% Owned Borralha Tungsten Project in Northern Portugal
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