Sun Oct 06 23:50:00 UTC 2024: ## Mortgage Rates Soar After Strong Jobs Report, Cooling Housing Market Further

**New York, NY** – Mortgage rates jumped significantly on Friday, reaching a new high for the year, following a strong jobs report that signaled continued economic strength. The average 30-year fixed-rate mortgage climbed 27 basis points, from 6.26 percent to 6.53 percent, according to the Mortgage News Daily (MND) index.

This increase, one of the largest single-day jumps MND has ever recorded, reflects a robust labor market that indicates a strong demand for mortgages, potentially keeping rates elevated. The U.S. Bureau of Labor Statistics (BLS) reported 254,000 new jobs added in September, exceeding analysts’ expectations and continuing a trend of low unemployment.

While the positive employment data suggests a “successful slow landing” of the economy, as stated by Mike Fratantoni, chief economist at the Mortgage Bankers Association (MBA), it also raises concerns about inflation not declining as quickly as the Federal Reserve (Fed) aims for. This could delay further rate cuts, which had been anticipated after the Fed’s 50 basis point reduction last month.

Despite the current surge, the MBA forecasts mortgage rates to stay within a narrow range over the next year. “The positive employment report will push mortgage rates to the top of that range, but we do expect that mortgage rates will stay close to 6 percent over the next 12 months,” Fratantoni said.

The rising rates are adding further pressure to an already sluggish housing market. Home sales have slowed significantly this year, with only 25 out of every 1,000 homes changing hands in the first eight months, according to Redfin. High mortgage rates are cited as a major contributor to this decline, with many homeowners holding off on selling due to the “lock-in effect” – preferring to keep their existing low-rate mortgages rather than face higher borrowing costs.

While the recent dip in rates in August did not result in a rebound in sales, Redfin senior economist Sheharyar Bokhari emphasizes that the market remains cautious. “We are seeing the opposite—sales are dropping and homes are sitting longer on the market,” Bokhari said.

Despite the Fed’s recent rate cut, uncertainty remains about the housing market’s future trajectory. Experts advise potential homebuyers to carefully weigh their options, recognizing that rates could potentially climb further.

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