I’m going to start September by looking into my crystal ball and at the same time I’m going to give everyone some perspective on what may or may not happen. My first prediction is that throughout this month, you will see a million headlines about “rates” dropping. The media is great at using vague terms or all-encompassing words to get people to click on their articles, but the reality is the article doesn’t provide the context or background to really know what is going on.

I’ve already seen some headlines about “Mortgage Rates Being at the Lowest Point,” but what the headline doesn’t say is “compared to what?” Yes, mortgage rates have started September lower than they were in August, which is great news, but I also want to give some perspective. Today the BLS reported that there were only 22,000 jobs created compared to the 75,000 Wall Street expected. We’ve been saying it for a while that the BLS data has proven to be very inaccurate but there might be some changes that have led to a more accurate picture.

In August, President Trump fired the Commissioner of the BLS and while online, you can read a bunch of stories about how the President did this because their August report showed weak jobs numbers. I’m not so sure that is the case; the entire economic community has been calling out the BLS for inaccurate figures for the past 2 years. Over the past 2 years, the BLS has had a trend of reporting data only to revise it later. In 2024, from their initial job growth reports to their final reports, they missed by double, meaning for every 2 jobs they reported were created, after revisions, only one was created.

The President and even Voting Members of the Fed have been saying we need lower rates, and one of the biggest catalysts to get lower rates is weak employment figures. Some have argued that the President fired the Commissioner of the BLS in order to put someone in place who will actually report accurately, even if it’s weak jobs numbers. Either way, this is all speculation but as it pertains to housing and mortgage rates, the worse the jobs numbers are, then the lower the 10 Year Treasury will go and mortgage rates follow suit.

This will also pressure the Fed into starting to cut the Fed Funds rate, which has a trickle-down effect into mortgage rates. While all of this sounds great for housing and mortgages, let’s put this into perspective. The first thing I want to make clear is that if the Fed cuts rates at their September 17th meeting, this DOES NOT mean mortgage rates will immediately drop. If we look back to last year when the Fed started a cutting cycle, the immediate impact was that Mortgage Rates went UP in the short term.

While I don’t think this will happen this rate-cutting cycle, it’s worth understanding so we all have some perspective going into the next couple of months. Wall Street has it already priced in a 90% chance the Fed will cut in September by 25 basis points. This will have trickle-down effects on the 10 Year Treasury Note, which in turn will trickle down into mortgage rates.

Now let’s get some perspective on the all-important 10 Year Treasury Note. As I write this article, the 10 year sits at 4.08, and we all know the lower the 10 Year the lower mortgage rates are. For most of 2025, the 10 Year has traded between 4.20 and 4.50, so as you can see, it’s not that much lower. To give some more context, in April of 2025, we saw the 10 Year get down to 4.02 (lower than today) and in September of 2024, we saw it get down to 3.62.

We believe mortgage rates are starting their longer-term decline, but we also don’t expect it to be a sharp drop. We expect mortgage rates to trend down over time and we expect the Fed to start a cutting cycle. Even if the Fed cuts 1.0% they would still be considered restrictive/neutral when it comes to monetary policy. The Fed has some room to run and we expect them to use it starting in September.

So the question is “how does this impact homeowners, new buyers etc…?” The answer is only in a positive way. If someone is looking to buy a home the price you pay for the home and the property itself is the most important thing. I wouldn’t wait to buy just to see if mortgage rates go lower because history has shown us that when mortgage rates go down, home prices tend to go up.

Clients can always refinance later so lock up your dream home now, and then be opportunistic with your financing later. If someone owns a home or has bought a home in the past couple of years, then there will be an opportunity to refinance coming up and it’s time to be strategic and opportunistic with your mortgage.

There is an old saying on Wall Street: “There are a lot of rich people who sold before the peak.” Trying to time rate markets is a losing proposition. Clients should look at their current mortgage, what a refinance would be, compare the break-even between savings and closing costs and then make a decision.

There is nothing wrong with taking savings off the table because if you guess wrong, it could end up costing you. Back in October of 2024 when rates fell, we saw some clients decide not to save $400 per month because they felt like rates would get even lower. When rates spiked after the Fed cut, they ended up being stuck in their same mortgage for the past 10 months and effectively lost $4,000 because they didn’t take a profit when they could.

While this is a very simplistic example the point we’re trying to make is that there is not a “perfect” time to refinance. There is a strategy and everyone’s strategy will be different. As everything starts to play out, always feel free to give us a call with questions or we can do a detailed look at your personal scenario so you can make the right decision for you and your family. Until then, buckle up, it’s going to be a crazy news cycle over the next month!