Mortgage rates have increased to 6.72% for the week ending July 10, following a strong jobs report indicating the U.S. economy added 147,000 jobs in June, lowering the chances of a Federal Reserve rate cut. The Fed's likelihood of a rate cut dropped from 24% to 5%. Despite the recent increase, mortgage rates remain lower than in May or June. Consequently, homebuyer interest has surged, with purchase applications up 9% from the previous week and 25% year-over-year. However, new listing activity shows signs of plateauing despite increased inventory.
"After declining for five consecutive weeks, the 30-year fixed-rate mortgage moved slightly higher following a stronger than expected jobs report," says Sam Khater, Freddie Mac's chief economist.
Last week's report from the Bureau of Labor Statistics showed the U.S. economy added 147,000 jobs in June, beating analyst expectations. The unemployment rate also fell slightly to 4.1%.
Despite the uptick this week, mortgage rates remain lower for now than at any point in May or June. Homebuyers have responded with renewed interest, with purchase applications rising 9% for the week ending July 4 compared with the prior week.
On the supply side, however, there are signs that new listing activity is beginning to plateau after a much-needed explosion in inventory over the spring. Annual growth in prices (+0.2%) was also established.
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