This was meant to be “jobs week” (JOLTs, ADP, BLS), but on account of the government shutdown, we only got ADP. On a nationwide basis, home prices are basically flat YoY, but that masks significant variation at the state and city level (half are down, half are up).

Despite being “in the dark” when it comes to new data, the Fed cut short-term interest rates for the second time this year and also announced the official end of QT — Quantitative Tightening. Mortgage rates remain near multi-year lows but can’t seem to crack into the fives.

Average mortgage rates are at their lowest levels in more than a year, which is already boosting refi activity and starting to bring buyers off the sidelines. Wouldn’t it be a treat if the September CPI report showed lower than expected inflation?

The data vacuum continues. We didn’t get retail sales this week, but we will get CPI next week. Meanwhile, commentary from Jerome Powell and other Fed members helped 10-year treasury yields drop below 4% and 30-year mortgage rates approach 6%.

We find ourselves in a data vacuum. No BLS jobs report last week. Maybe no CPI report next week. But mortgage rates are holding steady near 6.3%, and the market is still expecting two Fed rate cuts before year end.

In three of the last four months, ADP’s private employment figure has gone backwards. In other words, the economy is losing jobs on a net basis. That doesn’t sound like a ‘solid’ job market to me.

The Fed cuts rates and mortgage rates go up? That’s counterintuitive, isn’t it? Well, yes, it would be, if it were true. But it isn’t. Markets anticipate change, and the bond markets had already priced in multiple Fed rate cuts well in advance of the actual Fed meeting.

The first rate cut of 2025 was both well-telegraphed by the Fed, and anticipated by the markets. Average mortgage rates are at their lowest levels in a year, and are only 20–25 basis points (0.20%-0.25%) from being at their lowest levels in 3 years! Summer may be over, but these lower mortgage rates are definitely going to heat up transaction activity — if they can last.

An already lackluster “jobs week” ended with a bang: the BLS jobs report showed that the US economy added just 22K jobs in August — well below expectations. That convinced the market that at least 2, and possibly 3, Fed rate cuts will happen before year-end.

So far, there has been nothing from “jobs week” to derail a Fed rate cut on September 17. In fact, the jobs data has generally come in weaker than expected. At the same time, a growing number of Fed members are voicing concerns about the upside risks to the unemployment rate.

The last week has been momentous, with Jerome Powell signaling rate cuts ahead, average 30-yr mortgage rates falling to near 6.50%, and national home prices declining for the fourth-straight month (on a seasonally-adjusted basis).

Mortgage rates drifted higher on growing concerns that the Fed might NOT cut rates on September 17. Meanwhile, home price growth continues to moderate nationwide and transaction volumes remain stuck at roughly 4 million existing home sales per annum.