Mortgage Rate Update

Mortgage Rates Fell This Week On Downward Revisions Of Economic Data And Cooling Labor Market

“After reaching their highest level in more than two decades last week, mortgage rates fell this week on economic data showing more modest economic growth in the second quarter and a cooling labor market,” said Orphe Divounguy, senior macroeconomist at Zillow Home Loans. “Revisions to the second quarter estimate of economic growth, which showed a moderation in consumer spending and large downward revisions to business investment – two factors frequently pointed to as sources of strong economic activity – helped push bond yields and mortgage rates downward.

Signs of a cooling labor market also helped rates trend lower this week. Labor demand is still far above pre-pandemic norms but is slowly easing: Job openings fell in June to their lowest level since March 2021. Cooling demand and slowing wage growth is expected to bring down core inflation further, which would likely provide more relief for rates. However, rising fiscal deficits in 2023 and beyond could prevent further cooling and keep interest rates, and mortgage rates, elevated.

This week’s release of core PCE inflation – the Fed’s favorite inflation gauge – and Friday’s employment report will likely cause large movements in Treasury yields and mortgage rates. Higher than expected inflation and jobs data could push rates back up.”

As of Aug. 30, the rate borrowers were quoted on Zillow for a 30-year fixed mortgage was 7.02%. Check Zillow for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

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