We’ve reached fresh new year-to-date lows in mortgage rates after Jerome Powell, speaking at the Jackson Hole Economic Summit on Friday, suggested that the labor market may be more important than inflation for the time being. If only someone had been saying that for a few years! All jokes aside, mortgage rates have been trending lower since Jobs Friday. Even though bond yields have increased, mortgage spreads have kept rates from straying too far from this year’s lows.
Mortgage rates from the site Mortgage News Daily fell 10 basis points today to 6.52%, marking a fresh new year-to-date low in mortgage rates for 2025.
Housing demand?
Now, I have noticed that when mortgage rates head from 6.64% toward 6% housing data typically gets better in the weekly data. Our weekly Housing Market Tracker data updates this every weekend, but let’s take a look at the most recent purchase application data. The key for purchase application data is that we want to see growth in both the weekly data and year-over-year data together in a more steady trend. So far in 2025, year-over-year growth in the data has been good, but the week-to-week data hasn’t been, as mortgage rates for the most part, have been above 6.64%.
Here is the weekly purchase application data for 2025:
- 15 positive readings
- 11 negative readings
- 6 flat prints
- 29 straight weeks of positive year-over-year data
- 16 consecutive weeks of double-digit growth year over year
Over the last three weeks, mortgage rates have remained below 6.64%, leading to positive weekly and year-over-year data. While the week-to-week growth has been modest, it has still been positive, and year-over-year growth has reached double-digit levels.
If mortgage rates can decrease to around 6% and remain there for a while, we could see at least 12 to 16 weeks of positive weekly application data, similar to what we experienced during the last two instances when rates approached 6%.
So, we need to see stronger week-to-week data here, and if that stronger trend can hold, it will result in more existing home sales as it has done the past few years. We recently wrote about the existing home sales data beating estimates, but it was due to a low bar.
Conclusion
Tomorrow’s HousingWire Daily podcast will discuss the aftermath of the Jackson Hole Summit and the potential for mortgage rates to drop further, especially if labor and economic data improve. Today, the focus of the Fed was on labor over inflation, leading to mortgage rates reaching a new low for the year.
The more intriguing developments for the rest of the year will involve the specific mix of news about the Federal Reserve, the labor data, tariffs and speculation about who the next Fed chairman will be. Additionally, there is the question of whether Trump will be able to get Fed Governor Lisa Cook fired, allowing him to appoint a new Fed governor. There is a lot on the agenda for the remainder of the year, so get the popcorn ready!