How Much Lower Can Mortgage Rates Go After the Jobs Report?
From HousingWire – “How much lower can mortgage rates go after Friday’s jobs report?”
“Mortgage rates fell 0.18% last week, breaking below the key threshold of 6.64%.” That’s the opening line from the HousingWire piece by Logan Mohtashami, published August 3, 2025 HousingWire. You can read the full article here.
In this post, we’ll break down what’s driving the recent rate movement, where experts think things are headed, and what it all means for buyers and sellers in markets like the Upper Valley and Lake Sunapee region.
If you’re a homebuyer, homeowner, or investor watching mortgage rates like a hawk, you may have noticed a recent—and welcome—dip. Following the release of July’s jobs report, mortgage rates fell to a 10-month low. But the natural question on everyone’s mind is: how much lower can they go?
What Happened: The July Jobs Report Surprise
Every month, the Bureau of Labor Statistics releases a snapshot of how many jobs the U.S. economy added or lost. July’s report came in weaker than expected—just 73,000 new jobs added, far below projections. On top of that, earlier job gains from May and June were revised downward by over 250,000 jobs.
That’s a big signal that the labor market may be cooling.
For the mortgage world, that news was significant. Why? Because a softer job market increases the odds that the Federal Reserve could cut interest rates sooner than expected. Bond investors started buying, pushing down yields on the 10-year Treasury note—a key benchmark for mortgage rates.
As a result, 30-year fixed mortgage rates fell below 6.6%, with some lenders quoting rates in the 6.4%–6.5% range, depending on credit scores and loan types.
Where Rates Could Go From Here
According to HousingWire analyst Logan Mohtashami, mortgage rates in 2025 are likely to stay within a 5.75% to 7.25% range. That wide band reflects all the uncertainty around inflation, Federal Reserve policy, and economic growth.
Here’s how he breaks it down:
- Best-case scenario (weak labor data continues, and the Fed cuts rates): We could see 30-year rates fall to 5.9%–6.1%.
- Moderate scenario (current trend holds): Rates stay in the 6.4%–6.6% range.
- Worst-case scenario (inflation picks back up, job market rebounds): Rates climb back up toward 7.0%+.
The main factor that would allow rates to drop further is a decline in the 10-year Treasury yield—particularly if it dips closer to 3.80% from its current range of 4.1%–4.3%. If that happens, and mortgage spreads (the difference between the 10-year yield and mortgage rates) normalize, we could see rates edge closer to 6% or even briefly dip below.
What This Means for Buyers
If you’re shopping for a home in the Upper Valley, Lake Sunapee region, or surrounding areas, this recent rate drop might give you a slightly better monthly payment—but it’s not a game-changer yet.
Here’s why:
- Affordability is still strained: Even with rates in the mid-6s, many buyers are still priced out due to the high cost of homes, insurance, and taxes.
- Inventory remains low: In towns like Lebanon, Hanover, Enfield, Norwich, and Grantham, quality inventory is still tight, which keeps upward pressure on prices.
- Waiting for rates to drop further might backfire: If rates drop significantly, competition will spike. Buyers who are waiting on the sidelines could rush in, pushing prices even higher.
The key takeaway: If you find a home you love and can afford the payment, don’t wait on the perfect rate. You can always refinance later if rates improve.
What This Means for Sellers
If you’re thinking of listing your home, this environment presents some real opportunities:
- Lower rates can bring more buyers back into the market, especially those who were discouraged earlier this year when rates hovered above 7%.
- The psychological boost of a “rate dip” often gets buyers moving—especially those who have been watching from the sidelines.
- If rates continue to drop toward 6% and buyer activity picks up, you may have a better shot at selling quickly and for a strong price, assuming your home is well-prepared and well-priced.
That said, the market isn’t what it was during the COVID-fueled boom. Buyers today are more cautious. They’re looking for homes that are priced right and in good condition. Overpricing is a mistake—even in a better rate environment.
Could We Return to 4% Rates?
It’s unlikely anytime soon.
According to a recent Investopedia–Zillow analysis, for a typical U.S. home to be affordable by traditional standards (where mortgage payments don’t exceed 30% of income), mortgage rates would need to drop to around 4.4%. But that’s just not in the cards with today’s inflation outlook and Federal Reserve posture.
Logan Mohtashami put it this way: “The housing affordability crisis won’t be fixed by rates alone.” We also need more housing supply, higher wage growth, and structural changes to zoning, permitting, and development pipelines.
So while it’s tempting to wait for those sub-5% rates again, doing so could mean missing out on years of equity growth in the meantime.
Local Perspective: Upper Valley & Lake Sunapee
In our local markets here in New Hampshire and Vermont, real estate doesn’t always follow national trends exactly—but mortgage rates absolutely influence buyer activity.
Here’s what we’ve been seeing:
- Homes that are priced appropriately and in move-in ready condition are still moving quickly.
- Fixers or homes priced above perceived value are sitting longer—even in towns like Hanover or Norwich.
- When rates drop even modestly (like this past week), we see a notable uptick in showing requests and online activity.
- Many buyers are recalculating their budgets now, especially if they were pre-approved earlier in the year at higher rates.
Sellers should see this moment as an opportunity—especially if they’re planning a fall listing. With schools back in session soon and the fall market around the corner, a continued decline in rates could drive more foot traffic and activity in late August through October.
Final Thoughts
Mortgage rates are down—but for how long, no one knows for sure.
If you’re a buyer, now may be a chance to lock in a better rate than we’ve seen in nearly a year. If you’re a seller, this is the kind of shift that could help your home stand out and sell faster—especially if more buyers jump back into the market.
Whether you’re thinking about buying, selling, refinancing, or just watching the market, it’s worth keeping a close eye on the next jobs report, inflation numbers, and the Federal Reserve’s September meeting. These events will shape the next leg of mortgage rate movement.
Need Help Navigating This Market?
I work with buyers and sellers across the Upper Valley and Lake Sunapee region—and I’d be happy to help you make sense of what this shifting market means for your goals. Whether you want to know what your home is worth, explore financing options, or find the right property, let’s talk.
Brendan Callahan
📞 603-443-3149
📧 brendan@susancolerealty.com
🏡 Licensed Realtor, Investor & Advisor
📍 Upper Valley & Lake Sunapee Region, NH/VT
