The inventory of homes for sale is up 28% year-over-year (more choices for buyers!), but 30-yr mortgage rates are back near 7% (affordability issues for buyers).

Talking Points took a break last week, so we’ve got a lot of news to catch you up on: contradictory data releases, the Fed meeting and more!

It’s been a very cruel October for would-be buyers, with average 30-yr mortgage rates spiking on concerns about job market strength, stubborn inflation, and fast-rising US debt levels. Looking on the bright side, however, inventory levels continue to rise and competition levels are falling.

The Fed cut rates by 50 basis points on September 18. Since then, average 30-year mortgage rates have RISEN by 50 basis points. Why? Because September jobs growth was a lot stronger, and September inflation (CPI) was a bit hotter than expected.

It’s been a tough week for homebuyers, with stronger September jobs growth sending bond prices lower and mortgage rates higher.

Mortgage rates have drifted higher since the Fed rate cut, as job openings (JOLTs) and job growth (ADP) came out stronger than expected, and Fed Chairman Jerome Powell talked up the economy’s strength.

With mortgage rates down sharply in the last 5 months, the volume of refinancing is already up big. But we have yet to see those lower rates translate to increased homebuyer demand.

An aggressive start to the Fed’s new easing cycle, with a 50 basis points rate cut announced on Wednesday.

The big story this week is 30-yr mortgage rates, which are already in the low sixes as the market anticipates multiple Fed rate cuts (and perhaps a recession) ahead.

“Jobs week” has so far delivered a very consistent message — hiring is slowing and layoffs are rising. We know that rate cuts will start on September 18. But will we get a 25 or 50 basis point cut?

It’s time to start cutting rates, said Fed Chairman Jerome Powell in his speech from Jackson Hole last Friday. Mortgage rates have already moved more than 1% lower in the last four months, improving mortgage affordability and making millions of loans refinance-able.

What a week! We had a huge downward revision to the BLS jobs growth figures, the Fed minutes explicitly said that a rate cut on Sept 18 was likely, and average mortgage rates moved below 6.5% (and are now 1% lower than they were a year ago).

Inflation (CPI & PPI) continued to ease in July, and average 30-yr mortgage rates approached 6.5%.