It’s been a tough week for homebuyers, with stronger September jobs growth sending bond prices lower and mortgage rates higher.

Mortgage rates have drifted higher since the Fed rate cut, as job openings (JOLTs) and job growth (ADP) came out stronger than expected, and Fed Chairman Jerome Powell talked up the economy’s strength.

With mortgage rates down sharply in the last 5 months, the volume of refinancing is already up big. But we have yet to see those lower rates translate to increased homebuyer demand.

An aggressive start to the Fed’s new easing cycle, with a 50 basis points rate cut announced on Wednesday.

The big story this week is 30-yr mortgage rates, which are already in the low sixes as the market anticipates multiple Fed rate cuts (and perhaps a recession) ahead.

“Jobs week” has so far delivered a very consistent message — hiring is slowing and layoffs are rising. We know that rate cuts will start on September 18. But will we get a 25 or 50 basis point cut?

It’s time to start cutting rates, said Fed Chairman Jerome Powell in his speech from Jackson Hole last Friday. Mortgage rates have already moved more than 1% lower in the last four months, improving mortgage affordability and making millions of loans refinance-able.

What a week! We had a huge downward revision to the BLS jobs growth figures, the Fed minutes explicitly said that a rate cut on Sept 18 was likely, and average mortgage rates moved below 6.5% (and are now 1% lower than they were a year ago).

Inflation (CPI & PPI) continued to ease in July, and average 30-yr mortgage rates approached 6.5%.

Has the Fed waited too long to start cutting rates? The unexpected climb in the July unemployment rate had the market reassessing recession risks.

The Fed kept rates steady (again), but said that a rate cut on Sept 18 was definitely “on the table” given progress on inflation and the recent rise in the unemployment rate. The bond market rejoiced, helping to send average mortgage rates near 6.6%.

Would-be homebuyers seem to be holding their breath, hoping that the Fed begins cutting rates soon. Home sales have remained subdued this spring/summer. But with the inventory of homes for sale rising, buyers are regaining some negotiating power.