Weekly Mortgage Market Update – Jobs Report Sparks Biggest Mortgage Rate Drop in Over a Year

The first week of September 2025 delivered a major shift in the mortgage market, with rates falling back near 11-month lows after weaker labor market data. For homebuyers in Raleigh, Cary, and Greensboro, lower rates translate into more buying power and a chance to enter the market with improved affordability. At the same time, North Carolina homeowners who purchased or refinanced when rates were higher now have an opportunity to revisit their loan options—whether through a VA IRRRL, FHA Streamline, or Conventional refinance—to lower monthly payments or shorten their loan term. This dual benefit makes the current moment one of the most promising for both buyers and refinancers in nearly a year.

The recent Jobs Report has set the tone for the mortgage market, influencing rates significantly.

How the Week Unfolded

Rates Start Higher, Then Reverse

The week began with a modest rise in mortgage rates driven by technical market factors—nothing that grabbed headlines. But by Wednesday, rates were already moving back down as bond markets responded to softer-than-expected labor market data, including a report showing lower job openings in July.

By midweek, mortgage rates had officially touched new 11-month lows, even if only slightly.

The decline in rates aligns with insights from the latest Jobs Report, highlighting labor market trends.

Thursday Calm Before the Storm

On Thursday, mortgage bonds improved again despite mixed economic data. Much of the move had less to do with fundamentals and more with traders positioning ahead of Friday’s jobs report—always anticipated to be the week’s defining event.

Investors were eager for the insights from the upcoming Jobs Report, making it a focal point for market adjustments.

Friday’s Jobs Report: The Main Event

The August Nonfarm Payrolls report delivered a shock: the U.S. economy added only 22,000 new jobs, far below the 75,000 forecast and well under July’s pace. Previous month revisions were again negative, confirming a trend of weakening employment.

This disappointing Jobs Report has far-reaching implications for economic forecasts and mortgage rates.

This report was critical because the labor market is one of the Federal Reserve’s two key mandates (the other being inflation). A slowing jobs market increases pressure on the Fed to cut the Fed Funds Rate, likely beginning at the September meeting.

Such data from the Jobs Report typically influences the Federal Reserve’s decisions on interest rates.

Bond markets, however, don’t wait for the Fed—they respond instantly. Investors poured into Treasuries and mortgage-backed securities, sending bond yields sharply lower and delivering the biggest one-day drop in 30-year fixed mortgage rates since 2024.

The response to the Jobs Report was immediate, showcasing the market’s sensitivity to employment figures.

Why Mortgage Rates Dropped So Sharply

Here’s the quick economics lesson:

• Weak jobs numbers = investors buy bonds

  Market reactions often rely heavily on the nuances found in the Jobs Report.

• Bond prices rise = yields (and mortgage rates) fall

• 10-Year Treasury yields (a key benchmark) slid to 4.08%, their lowest since March 2025

• Mortgage bonds followed suit, pushing rates back into the mid-6% range

  These trends are directly tied to the findings of the Jobs Report and its implications for the economy.

According to Freddie Mac, the average 30-year fixed rate is now around 6.50%, the lowest since last October. Some Triangle-area lenders are even quoting slightly better, depending on the borrower’s profile.

Raleigh Mortgage Market Snapshot

For homebuyers and homeowners across Raleigh, Cary, Durham, and Greensboro, this week’s market shift opens up meaningful opportunities:

With the latest Jobs Report suggesting lower employment numbers, many are reassessing their financial strategies.

• 11-month mortgage rate lows mean improved buying power, helping offset today’s competitive housing market.

• First-time buyers may find monthly payments more manageable, even with tight inventory.

  The ramifications of the latest Jobs Report are felt across various buyer segments in the market.

• Refinancing is suddenly attractive again—especially for VA, FHA, and conventional borrowers with rates locked above 7%.

• Move-up buyers can explore upgrading with less payment shock, as lower rates help balance higher home prices.

At Certified Home Loans Raleigh, we’re already seeing increased refinance interest and stronger pre-approval activity as Triangle families look to seize this affordability window.

What to Watch Next Week

Even after a massive rally in bonds, markets remain sensitive to upcoming data. Next week’s economic calendar includes several high-impact reports:

Next week’s data, including the upcoming Jobs Report, will be pivotal.

• Monday: Consumer Inflation — A surprise jump in consumer prices could stall rate momentum.

• Tuesday: Non-Farm Payroll Annual Revision –  Any revisions to prior BLS Jobs Report will be closely monitored for signs of economic recovery or weakness.

• Thursday: Consumer Price Inflation — While not always predictive, it may reveal trends in wholesale inflation, which can influence mortgage rate movement.

• Friday: Consumer Sentiment — This report will provide insight into household confidence, a factor that can sway bond markets and mortgage rates.

With mortgage rates already at 11-month lows, further improvement is possible—but not guaranteed. Stronger-than-expected data could cause a reversal just as quickly.

Should You Lock or Float Your Mortgage Rate?

This is the question every Triangle borrower is asking: lock now or wait?

The reality is that mortgage markets often “price in” good news before the Fed acts. By the time the Fed actually cuts, rates may already be moving higher. That means the biggest savings opportunities are often short-lived.

For Raleigh-area buyers and refinancers, the current rate environment is one of the most favorable we’ve seen in a year. Locking now protects you against a rebound, while some loan programs may offer float-down options if rates continue lower.

Final Thoughts for Triangle Buyers and Homeowners

This week’s August Jobs Report sparked the biggest single-day mortgage rate drop in more than a year, driving rates to levels not seen since Fall 2024. For homebuyers in Raleigh, Cary, and Greensboro, this creates a rare affordability window. For homeowners with rates at 7% or higher, refinancing is worth revisiting.

Many are now analyzing the implications of the Jobs Report on their financial decisions.

The market outlook remains data-dependent, with inflation and labor reports set to drive volatility in the coming weeks. Acting now—while rates sit at 11-month lows—could lock in meaningful savings before the opportunity fades.

✅ Ready to explore how today’s mortgage rate lows impact your homeownership goals? Contact Certified Home Loans Raleigh today for a personalized strategy—whether you’re buying, refinancing, or planning ahead.