It’s another week where mortgage rates seem to be doing a whole lot of nothing — a good thing if you can afford an APR around 6%, though not so good if you were hoping to score a sweetheart of a deal this February.
In the week ending Feb. 5, the average 30-year fixed mortgage rates stayed completely flat from the week prior at 6.01%, according to rates provided to SS by Zillow. APRs for 30-year fixed mortgages averaged 5.99% in January, nearly a hundred basis points — or an entire percentage point — below January 2025’s average of 6.96%. (A basis point is one one-hundredth of a percentage point.)
No jobs report this week
We were supposed to get January’s jobs report tomorrow from the Bureau of Labor Statistics (BLS), but it’s been delayed until Feb. 11 because of the (now ended) partial government shutdown. The Consumer Price Index, which provides a key federal measure of inflation, has also been pushed a few days, from next Wednesday to next Friday.
In March, central bankers will be tasked with balancing unemployment and inflation at the Federal Reserve’s next meeting. Weak employment data could support a case for lowering the federal funds rate, which could put downward pressure on mortgage rates. This will be especially true if inflation also slowed in January.
It’s a little frustrating that we have to wait and see whether the Fed’s decision to pause its rate-cutting streak was premature. But this partial shutdown was nothing compared to the historic 43-day stalemate back in the fall — after which rebuilding a complete picture of the economy felt like sewing a patchwork quilt while blindfolded and wearing oven mitts.
Data paints a bleak picture of private sector hiring
While we wait for the BLS to release its employment data, payroll processor ADP has given us a view into the private sector employment situation.
ADP’s January national employment report released Feb. 4 showed that the private sector added just 22,000 jobs — far below the 45,000 jobs projected by economists surveyed by the Wall Street Journal.
“When the labor market is adding fewer jobs (and losing them in some sectors), the economy is less dynamic,” said Elizabeth Renter, SS’s senior economist. “For households this may mean fewer opportunities for professional advancement and pay raises. And for those out of work, a more difficult time finding a replacement job.”
Will Warsh harsh Powell’s strategy?
While much of the country still faces chilly temperatures, let’s mentally shift ahead to May.
Jerome Powell’s term as chair of the Federal Reserve ends on May 15, meaning he’ll lead two more Fed meetings before his tenure is up. After that, President Trump’s choice of successor Kevin Warsh is expected to take over, provided he is confirmed by the Senate.
Most analysts are currently predicting that the Fed will continue to hold rates steady in March and April under Powell’s leadership. If they do, mortgage rates might continue to hover close to 6% for the remainder of winter and the beginning of spring.
Powell was bullish after the January Fed meeting, saying data has shown a “solid footing” for economic growth going into 2026. Powell is often somewhat opaque in his post-meeting press conferences, so this is about as direct of an indicator that analysts can hope for when trying to tease out his long-term strategy.
Meanwhile, Trump has been far more frank when talking about his own ideas for the direction of the Fed, including his belief that Warsh is aligned with his goal of cutting rates further. Trump has called for interest rates to be slashed to 1% or lower.
In an interview with NBC Nightly News on Feb. 4, the president was asked if there was “any doubt in [his] mind that interest rates are going to be lowered” once Warsh assumes office. Trump responded with confidence: “Not much.”
If Warsh is confirmed and publicly agrees with the president, lenders may start to lower mortgage interest rates in late spring in anticipation of a new direction for the Federal Open Market Committee.