Mortgage Rates and Homebuyers

For the past few years, the housing market has felt like a roller coaster. Rising borrowing costs made homeownership harder for buyers and limited opportunities for homeowners who wanted to refinance. But recently, there’s been a shift — and it’s tied directly to changes in the job market and broader economy.

Signs the Job Market Is Losing Steam

There’s growing evidence that the U.S. job market is starting to weaken. Just last week, initial unemployment claims reached a four-year high. On top of that, continuing claims — the number of people who remain unemployed and are still receiving benefits — have stayed above 1.9 million for 16 weeks in a row. This means more people are staying out of work longer.

Adding to the concern, the government recently revised job growth numbers downward by 911,000 jobs for the 12 months ending in March 2025. That’s an average overstatement of 76,000 jobs per month — the largest downward revision on record. In short: the job market hasn’t been as strong as many thought.

Inflation Holding Steady

At the same time, inflation numbers came in right around expectations:

• The Consumer Price Index (CPI) showed a modest monthly increase.
• Annual inflation edged slightly higher to 2.9%.
• Core CPI, which excludes food and energy, stayed steady at 3.1%.
• Producer Price Index (PPI) — wholesale inflation — came in below forecasts.

This paints a picture of an economy where inflation is manageable, but growth is softening.

What the Fed Is Likely to Do Next

With the job market slowing and inflation largely under control, financial markets now expect the Federal Reserve to step in. In fact, traders are pricing in a 100% chance of a rate cut at the Fed’s next meeting on September 17.

Quick reminder: when the Fed adjusts interest rates, they’re changing the short-term Fed Funds Rate — the rate banks charge each other for overnight lending. This rate doesn’t directly set mortgage rates, but it strongly influences the direction they take.

What This Means for Homebuyers and Homeowners

So, what does all this mean if you’re thinking about buying a home, refinancing, or simply trying to make sense of the market? Here are a few key takeaways:

1. Opportunity Could Be Opening

When economic uncertainty rises, mortgage costs often shift lower. For buyers who have been waiting on the sidelines, this may be the opening they’ve been hoping for.

2. Refinancing May Make Sense

For homeowners with higher-cost mortgages, today’s environment could be the right time to explore refinancing. Lower monthly payments, debt consolidation, or even shortening the term of your loan could become options again.

3. Pre-Approval Puts You Ahead

If you’re considering a purchase, competition could pick up as more buyers re-enter the market. Getting pre-approved now shows sellers you’re serious and prepared, giving you an edge when the right home comes along.

4. Guidance Matters More Than Ever

With economic data shifting week by week, having an experienced mortgage advisor in your corner can help you make confident decisions. The right strategy matters just as much as the rate itself.

The Bottom Line

The job market is weakening, inflation is steady, and the Federal Reserve is expected to act soon. For homeowners and homebuyers, this could create an important window of opportunity.

Whether you’re thinking about buying, refinancing, or simply weighing your options, now is the time to explore what this market shift means for you. The best opportunities go to those who are prepared.

👉 Ready to take the next step? We’re here to help you navigate today’s market with clarity and confidence.