I hope your week is going well! It has been a turbulent stretch for rates, so let me break down what happened and what it means for you.
Here’s Where Rates Stand
Mortgage rates climbed again, up roughly a quarter of a percent in just two weeks by Freddie Mac’s measure, and daily rates are now at their highest point since late 2023. The 10-year Treasury yield, the benchmark bond investors watch most closely, pushed above 5 percent for the first time since 2007. A Fed governor hinted at more rate hikes, business activity surveys came in much stronger than expected, and a big Treasury auction drew weak demand, all in the same day.
Why It Could Be Worse
Mortgage rates have held up better than Treasury yields because the gap between the two has narrowed compared to a few years ago. Some of the recent pressure also looks tied to quarter-end trading, which may ease as October begins, though nothing is guaranteed.
What to Watch
Friday’s jobs report. Economists expect modest job growth with unemployment holding steady, and any surprise could move rates quickly.
Builders Are Getting Creative
New-home sales rose in August as builders cut prices, offered incentives, and built smaller homes. A typical new home now costs about $35,000 less than a typical existing home. Here’s why that matters: compared to a year ago, today’s rates add roughly $150 a month to the payment on a typical new home with 20 percent down (principal and interest only). Builder rate buydowns and closing cost help can offset a lot of that. Builder confidence just fell to its lowest level in a year, so many are motivated to make a deal.
Prices Are a Local Story
Nationally, prices are still edging up, but Dallas and Austin are lower than a year ago, while West Palm Beach and San Francisco are up by double digits. Your negotiating power depends heavily on your neighborhood.
My Best Tip
Focus on the monthly payment, not the headline rate. Let’s compare a few scenarios side by side, including seller credits and buydowns, so you can see what actually fits your budget.
