If you’re trying to buy a home, you’ve probably noticed that mortgage rates are dropping.
But it’s not just the Federal Reserve you need to watch—it’s also the bond market.
Long-term bond yields have been going down because people expect the Fed might cut interest rates soon, and there are worries about a possible recession.
When bond yields fall, mortgage rates usually fall too.
This month, 30-year fixed mortgage rates hit their lowest level since 2024—around 6.29%.
When the government reported that fewer people were hired in August than expected, Treasury yields dropped, and mortgage rates fell even more.
Part of the fast drop in mortgage rates comes from the complicated world of mortgage-backed securities—bonds that bundle lots of home loans together.
Changes in that market can make mortgage rates move quickly.
In short, lower bond yields and the tricky mortgage bond market are helping bring mortgage rates down, making it a better time for some people to buy a home.