Weak September Jobs Report Could Bring Mortgage Rates Slight Relief, Economists Say

Friday's September jobs report landed with a thud for the labor market and a sliver of hope for homebuyers. U.S. employers added just 29,000 jobs, well short of the roughly 84,000 economists expected, while the unemployment rate ticked up from 4.1% to 4.2%, according to the Bureau of Labor Statistics. Revisions also shaved a combined 60,000 jobs off the July and August payrolls, turning July into a net loss of 10,000 jobs. Wage growth cooled to 3.0% annually, the smallest year-over-year gain since May 2021.

Housing economists were quick to read the mortgage implications. 'Mortgage rates could see slight relief after brutal rises over the past month,' said National Association of Realtors chief economist Lawrence Yun in a statement, noting that 'the job market will not exert upward inflationary pressure and oil prices have retreated somewhat.' Rates have climbed from about 6.5% in July to nearly 7.3%, making any relief welcome.

First American senior economist Sam Williamson echoed that view, saying the report makes it easier for the Federal Reserve to leave its benchmark rate unchanged at its October 27-28 meeting after September's increase. Market-implied odds of the Fed holding jumped to 82.8%, per CME FedWatch, and the 10-year Treasury yield - the benchmark lenders use to price home loans - fell about 3 basis points to 5.205% on Friday.

But Williamson cautioned against expecting a broad rebound: 'September's softer hiring may offer homebuyers some much-needed relief on mortgage rates, but that relief comes with a catch. Lower borrowing costs improve purchasing power, while slower hiring limits the confidence and life events that drive home sales.' For South Bay buyers, the takeaway is modest: financing costs may stop climbing for now, but steady job security matters as much as the rate itself.

Source: Inman - https://www.inman.com/2026/10/02/september-jobs-report-mortgage-rates/

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