Following the release of August non-farm employment data that fell far short of expectations, the average rate on 30-year fixed mortgages in the United States dropped 16 basis points to 6.29% on Friday. This marks the lowest level since October 3 of last year and represents the largest single-day decline since August 2024. After Friday's sharp drop, this key mortgage rate finally broke below the 6% range where it had been stuck for months.

Matt Graham, Chief Operating Officer at Mortgage News Daily, stated: "This is a fairly direct reaction to a highly anticipated jobs report by the market. It's a good reminder that when it comes to economic data, the market decides what matters, and the bond market's clear voting record shows that employment reports have consistently been the biggest potential source of rate volatility."

Graham also posted on X platform that many lenders are now pricing better than October 3, offering rates in the high 5% range.

This decline stands in stark contrast to the situation in May this year, when 30-year fixed rates reached a peak of 7.08%. For homebuyers currently in the market, this represents a significant change, especially against the backdrop of persistently high home prices.

For example, if someone purchases a home for $450,000 (slightly above the national median home price in August), with a 20% down payment and a 30-year loan (excluding taxes and insurance):

At a 7% interest rate, the monthly payment would be $2,395; At a 6.29% interest rate, the monthly payment would be $2,226; The difference is $169 per month. While this may not sound like much to some, it could not only mean the difference between affording a home but also whether one qualifies for a loan.

Homebuilder stocks responded positively on Friday, with companies like Lennar, DR Horton, and Pulte all rising approximately 3% during trading. The homebuilding ETF ITB has shown strong performance over the past month, gaining nearly 13% as rates gradually declined.

Previously disclosed 13F filings from mid-August showed that Warren Buffett's Berkshire Hathaway took new positions in US residential developer Lennar and one of America's largest real estate developers, D.R. Horton, during the second quarter. These two real estate stocks were not disclosed in the first quarter 13-F report filed in May, making them "mystery holdings" that attracted market attention.

Specifically, Berkshire purchased approximately 7.05 million shares of Lennar (LEN), with a market value of about $780 million at quarter-end, representing 0.3% of holdings and ranking 26th in the portfolio. Berkshire bought over 1.48 million shares of D.R. Horton (DHI), with a market value of approximately $191 million at quarter-end, representing 0.07% of holdings.

Analysts point out that the biggest question is whether this mortgage rate decline is sufficient to bring homebuyers back to the market.

Leading indicator mortgage loan demand has yet to respond to the gradually improving rates. Data from the Mortgage Bankers Association shows that mortgage applications for home purchases last week were 6.6% lower than four weeks prior.

Danielle Hale, Chief Economist at Realtor.com, said after the August non-farm payroll report was released: "Homebuyers are struggling with affordability constraints, sellers face more intense competition, and builders are dealing with declining demand. These conditions haven't brought disaster, but they have certainly given the real estate market a brutal summer."

Some analysts believe that only when mortgage rates fall to the 5% range will there be a truly substantial impact on buyers. Home prices remain stubbornly high, and while price growth has clearly cooled, there hasn't been a real decline nationwide in the United States. Additionally, uncertainty about the economy and job market has many potential buyers continuing to wait on the sidelines.