Good morning on this best day of the week Wednesday from your Hometown Lender,
Rates are improving a bit from yesterday…
Getting some help from the JOLTS (Job Openings and Labor Turnover) data this morning which came in 200k lower than expected. That’s a big miss and is signaling even cooler labor demand. The Fed is balancing inflation vs the labor market, and weakness in the labor market supports a September cut and more future cuts. Fed Governor Chris Waller (who dissented last month and wanted to start cutting months ago) didn’t waste any time and called for Fed rate cuts now. Today’s report is day one of the three day employment gauntlet. Tomorrow brings unemployment claims and then Friday is the big day for all the marbles with the BLS jobs report. We will see how Friday changes expectations. I don’t know which way it will go but I do know there will be volatility. I would not float going into Friday.
To show some support for housing, Treasury Secretary Scott Bessent said Monday that President Trump may grant some exclusions on tariffs for home construction supplies, potentially offering relief to homebuilders.
Here’s a higher level recap of the state of mortgages:
🏦 Mortgage Market Overview – September 3, 2025
Below is a summary of current rate data as of the morning of September 3, 2025:
| Loan Type | Avg Rate | APR | Daily Change | 1-Month Change |
|---|---|---|---|---|
| 30-year Fixed | 6.56% | 6.60% | -0.04% | -0.10% |
| 15-year Fixed | 5.78% | 5.81% | -0.03% | -0.12% |
| 5/1 ARM | 5.66% | 5.73% | -0.07% | -0.09% |
| 30-year Jumbo | 6.55% | 6.58% | -0.03% | -0.08% |
| 30-year FHA | 5.79% | 6.99% | 0.00% | -0.13% |
| 30-year VA | 5.86% | 6.00% | -0.02% | -0.16% |
Refinance rates are slightly higher, with 30-year refinance averages at 6.79%. Minimal day-over-day volatility reinforces the trend of modest declines since July’s peak.
Key market characteristics:
- Mortgage rates fell decisively in August, with the 30-year average dropping from 6.84% in July to 6.66% in August.
- Jumbo rates are aligned closely with conforming 30-year rates, reflecting market liquidity and investor demand for return.
- ARMs continue to gain traction but remain far below their pre-2008 share of originations.
- MBS prices are moderately weaker today, a signal for potentially higher mortgage rates if the trend sustains.
- Sentiment is split: optimism for easing vs. persistent inflation and fiscal uncertainty.
📰 Economic & Political Headlines
Today’s narrative is driven by renewed calls for rate cuts, led by Federal Reserve Governor Christopher Waller. In multiple interviews, Waller repeated his call for a September cut, stressing:
“When the labor market turns bad, it turns bad fast… We need to start cutting rates at the next meeting.”
He added the Fed “doesn’t have to go in a locked sequence of steps” and can adjust as inflation and labor data evolve.
Waller’s dissent at the last Fed meeting has made him a bellwether for the growing dovish camp. CME FedWatch now shows a 90–96% chance of a 25bp cut on September 17.
🌍 Political & Global Factors
- U.S. trade deficit widened to -$103.8B vs. -$87.7B expected, a potential drag on Q3 GDP.
- Calls to remove Fed Governor Lisa Cook continue, adding uncertainty around Fed governance.
🔮 Forward-Looking Rate Forecast
📉 Rate Cut Odds
- Markets still price in a 90% chance of a September cut.
- Next key data: Friday’s August Jobs Report. Weak jobs data could lock in the Fed’s decision and open the door to lower Q4 mortgage rates.
📈 Yield Curve & Recession Watch
- Flat curve suggests uncertainty, not imminent recession.
- A steeper curve would indicate stronger growth expectations and could narrow mortgage spreads.
💵 Global Market Signals
- Dollar Index rose to 98.06, limiting imported inflation.
- Treasury yields hovering near 4.24% with softer MBS prices point to limited near-term rate relief.
📅 Weekly Economic Calendar (Sept 2–6, 2025)
- Wed 9/3: ISM Services PMI, Factory Orders (High impact)
- Thu 9/4: Weekly Jobless Claims, Productivity & Unit Labor Costs (Medium impact)
- Fri 9/5: August Jobs Report (Very High impact)
🔔 Key Watchpoint: Friday’s Jobs Report will be pivotal. A soft print could reinforce the Fed’s dovish stance and push mortgage rates lower into Q4
📌 Strategic Takeaways for Clients
- 🕒 Locking vs. Floating: Locking is prudent unless Friday’s jobs data surprises dovishly.
Posted by Noble Home Loans | Equal Housing Lender | NMLS #328275 |
For informational purposes only. Not a commitment to lend. Rates subject to change.
Stay safe and make today great!