Hi Reader,

The average 30-year fixed mortgage rate ended the week at 6.81%, up from 6.77% the prior week, according to Mortgage News Daily. Freddie Mac reported an average rate of 6.66%, up slightly from 6.65% the week before.

Why rates moved higher

Over the course of last week, the markets got increasingly nervous about long term inflation and U.S. spending.

Earlier in the week, Treasury yields actually moved lower (good for mortgage rates) as weaker economic data gave bond investors some reason to believe the economy could be slowing. New-home sales fell 10.5% in July, considerably more than expected, and consumer confidence also came in below forecasts. The 10-year Treasury fell to 4.638% on Tuesday.

That changed as the week progressed.

On Wednesday, stronger inflation numbers and economic indicators pushed yields back up as investors became more concerned that the Federal Reserve may still have work to do on inflation.

Then on Friday, Fed Chairman Kevin Warsh used his Jackson Hole speech to emphasize that, although some recent inflation readings had been better than expected, he did not believe the underlying inflation trend had meaningfully improved.

Markets interpreted his comments as hawkish, meaning investors saw the Fed as less likely to ease monetary policy and potentially still willing to raise rates if inflation remains stubborn.

The reaction was immediate. The 2-year Treasury yield, which is particularly sensitive to expectations about Fed policy, jumped sharply (as seen dramatically pictured in this chart below), while the 10-year finished the week at 4.721%.

The week ahead: While it is impossible to predict the trajectory of mortgage rates due to macroeconomic factors like war, oil and other events, last night the U.S. and Iran traded fire again - the first time in a month, sending oil prices up. So, its probably not out of bounds to expect more volatility. As they say in the mortgage business, "lock 'em if you got 'em."

The important number to watch next is employment. August payroll figures are due this week. A weaker labor report could give bonds some relief, while continued strength would reinforce the argument that the Fed can afford to remain focused on inflation.

Buyers may be waiting for a market that doesn't exist

One of the more interesting housing stories this week was about the disconnect between what buyers think is happening with mortgage rates and what is actually happening.

​A survey of roughly 1,000 prospective buyers found that 45% believe mortgage rates are higher than they actually are, while 72% have delayed their home search waiting for rates to improve. Those buyers have been waiting an average of 13 months.

And some people are beginning to regret it.

Among buyers who are waiting, 41% say they regret not buying before mortgage rates or home prices moved higher, and another 17% say they would have purchased sooner if they could redo the past year.

There are misconceptions about financing as well.

In another survey, 55% of renters believed they needed at least 20% down to buy a home, while 45% believed they needed a credit score of at least 700. In reality, the median down payment among first-time buyers last year was 10%, and some programs allow substantially less.

Here's an important conclusion:

Don't assume a buyer who says, “I'm waiting for rates,” has actually run the numbers.

Sometimes a conversation with a mortgage professional can uncover options, or misconceptions, that materially change the decision.

Who could benefit most?

1. A client who has said, “I’m waiting for rates to come down.”​
   Send them to me and I’ll run the numbers at today’s rate versus the rate they are waiting for.
   ​Benefit: They can see whether waiting actually improves the payment enough to justify delaying the purchase.
2. A client who thinks their credit isn’t good enough yet.​
   I’ll look at how their current credit profile affects pricing and what changes could realistically improve their options.
   ​Benefit: Instead of sitting out indefinitely, they get a concrete financing strategy and a clearer timeline.
3. A client who has stopped looking because the monthly payment feels too high.​
   I’ll break down different purchase prices, down payments and financing structures to see where the numbers become comfortable.
   ​Benefit: They leave with an actual target price and payment instead of simply concluding that “everything is too expensive.”

Hard facts and analysis are 100x better than guessing!

If someone in your pipeline sounds like one of these buyers, call me. A 15-minute financing conversation may be all it takes to turn uncertainty into a workable plan.

I hope your week is off to a great start!

-Nicole

P.S. Do you know someone who would like to receive this newsletter? Here's a sign up link you can share.​

Connect with me on these: LinkedIn, Instagram and YouTube.

Nicole Hamilton Bernheimer | NMLS #2354049

nicole@homeownering.com, 917-650-0167

​More about me​