CNBC’s Diana Olick joins 'The Exchange' to discuss mortgage rates dropping on jobs report.

Mortgage rates have dropped sharply, marking the largest one-day decrease since the previous year, according to data from Mortgage News Daily. The average rate for a 30-year fixed mortgage fell by 16 basis points to 6.29%, the lowest since early October of last year, with some lenders offering even lower rates. This decline follows a trend of slowly falling rates in recent weeks, but has not yet led to a noticeable increase in mortgage applications for home purchases.

Despite the lower rates, high home prices and broader economic uncertainties continue to affect potential homebuyers' decisions. While the reduction in monthly payments is welcomed by homebuilders and has boosted related stocks, experts suggest that rates may need to fall further to significantly stimulate homebuyer activity.

Mortgage rates drop on jobs report

Well, we got a big reaction from the mortgage market to today's jobs report. Let's get to Diana Olick with the very latest on that Diana Melissa this is the biggest one-day drop in rates since August of last year the average on the 30-year fix dropped 16 basis points this morning to six point two nine percent that according to mortgage news daily And that is the lowest rate since October 3rd of last year So we're finally breaking out of this high six percent range that it's been in for many months Mortgage news daily's Matt Graham also says many lenders are priced better than this at rates of six point one two five percent and many Lenders will be quoting in the high fives today, so it's a major difference from May when that rate went over seven percent So let's do some math here if you're buying a four hundred fifty thousand dollar home Which is around the national median using a 30-year fix with 20% down and not including taxes or insurance your monthly payment at seven percent would be $2,395 today it would be $2,226 that is a difference of $169 per month now that might not sound like a ton But it's definitely making the homebuilder stocks happy names like Lennar dr Horton and Palti those first two up over three percent on the day And how about the home building ETF ITB it's been running hot for the last month as rates move slowly lower It's up close to 13% now over the past month the big question is will this be enough to really get homebuyers back in? The market rates as I said have been falling all month slowly and mortgage applications to buy a home They have not really responded Some say you got to get a five handle on that rate to really make a difference given how high home prices still are Guys back to you And I guess that was sort of my next question Diana And that is you know The drop that we saw in today's mortgage rate is based on a drop that we saw in rates Days before and so when we see the 10-year yield right now at four point zero plus percent We could see that show up in even lower mortgage rates next week It could be look mortgage rates loosely follow the yield on the 10-year Treasury, but not directly and there are a lot of other things Impacting it like what is the future look like? What do mortgage buyers those buyers of MBS think about the future and you talk about the CPI etc? So there's a lot that plays into these rates, but really if you're focusing on that homebuyer, they're concerned about prices They're also concerned about the broader economy uncertainty jobs, etc. So that plays into it as well Yes, you do buy that monthly payment and you know you date the rate they say But again, it's going to have to be are they feeling good about their personal economic financial situation to make such a big? Investment, you know, which is a home. It's the biggest for everybody Right. Exactly. The confidence piece is is huge. Thank you, Diane

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