You’ve probably seen the takes: “Rate cuts won’t help mortgage rates.” We heard the same chorus last year, and it didn’t hold up. In the weeks leading into the Fed’s 50 bp cut last September, mortgage rates fell roughly 0.625% and then held steady for a while. They didn’t jump again until October 4, when a run of “blockbuster” jobs headlines (remember the 330K print) pushed yields higher and dragged mortgage rates up with them.
What that tells us: markets move ahead of the Fed. Bond traders don’t wait for the meeting, they price in expected policy shifts beforehand. Since Chair Powell’s Jackson Hole remarks, 10-year Treasury yields have already slipped ~27 bps, reflecting the market’s conviction that a September cut is coming. Translation: part of the recent improvement you’re seeing in mortgage pricing is the market pre-loading that cut.
Why this time could be better: the labor data is coming in much softer. If that continues, it should reinforce lower rates rather than derail them.
There’s a key cross-check coming: the BLS releases its 12-month QCEW revision tomorrow at 10:00 a.m. ET. Early reads suggest the economy may have created 800,000 to 1,000,000 fewer jobs from Q1 2024 to Q1 2025 than first reported, roughly 67,000–83,000 fewer per month. If that bears out, it implies 40–50% of last year’s reported gains weren’t actually there. That would recast the whole labor narrative: not only is hiring cooler now, it may have been overstated all along. A revision like that increases the odds of multiple cuts this year and removes a major headwind that pushed mortgages higher last fall.
Bottom line going into tomorrow: if the revisions are as soft as expected, it could be an inflection point that firms up the case for lower rates ahead.
WHAT TO WATCH THIS WEEK
12-Month BLS Data Revision: Tuesday
Revisions to jobs and wage data alter how “tight” the labor market looks.
Softer revision → bond-friendly (yields ↓, mortgage rates ↓)
Stronger revision → bond-unfriendly (yields ↑, mortgage rates ↑)
August PPI: Wednesday
Producer prices filter into consumer inflation later.
Cooler PPI → yields ↓, mortgage rates ↓
Hotter PPI → yields ↑, mortgage rates ↑
OPEC Monthly Report: Thursday
Oil outlook hits energy costs and headline CPI.
Tighter supply/stronger demand → yields ↑, mortgage rates ↑
Easier supply/weaker demand → yields ↓, mortgage rates ↓
August CPI: Thursday
The big one before the Fed meets. Focus on core and “super-core” services.
Core ≤ 0.2% → yields ↓, mortgage rates ↓
Core ≥ 0.3–0.4% → yields ↑, mortgage rates ↑
Michigan Consumer Sentiment: Friday
A read on confidence and spending power.
Weaker sentiment → yields ↓, mortgage rates ↓
Stronger sentiment → yields ↑, mortgage rates ↑
Quick refresher: when bond prices rise, yields fall, and mortgage rates usually follow. Bonds rally when growth and inflation cool.
All of this tees up the September Fed meeting and will influence the rate path into the fall. I’ll be watching closely Tuesday–Wednesday, September 16–17, 2025.
BUYING POWER
Lower rates expand what a buyer can afford, that’s the window many have been waiting on. A few practical steps:
Stay within your strategy. Lower rates help, but they also bring more buyers back. Winning still comes down to buying within your means.
Get fully approved before you write. Speed is leverage. Clean files, short closes, and tight contingencies win even when you’re not the top price.
Line up funds early. If you’re selling stock, using retirement loans, or accepting gift funds, prep now so closing isn’t a scramble.
Expect more motivated sellers and more competition. As demand returns, homes that have lingered are more likely to offer concessions, but that window won’t stay open long.
Keep your circle tight. Everyone has opinions. Focus on the people who will live under your roof, your budget, and your non-negotiables.
WHY BUYER WINDOWS ARE SHORT
History is blunt: the U.S. housing market favors sellers most of the time. Since WWII, home prices have risen in roughly 70% of years. Buyer leverage shows up in brief spurts—typically during recessions or high-rate shocks and then disappears when rates roll over and demand rushes back.
Over the last 20 years, the median U.S. price has more than doubled, including 90%+ appreciation since 2013.
Real, durable buyer’s markets have been rare: the early 1980s, 2008–2012, and a short 2022–2023 window.
When rates fall after spikes (early ’80s, early ’90s, post-2008), demand rebounds fast and prices climb quickly.
Supply reacts slowly, it takes years to build, so inventory tightens as soon as buyers return.
In the 2008–2012 downturn, prices fell ~27% nationally yet within five years, those losses were erased.
Today, affordability is stretched, inventory is improving, and rates are likely to drift lower later this year. As they do, sidelined buyers will re-enter, competition will intensify, and sellers regain control. In the Bay Area, that shift typically happens faster than in most markets.
If you can buy within your budget, don’t assume this window lasts. As the data cools and rates ease, the clock runs on buyer advantage.