September jobs report was weak — and that's good news for mortgage rates

👋 Happy Monday, everyone. Today’s newsletter is 697 words, a 2.5-minute read.

1. September jobs report was weak — and that's good news for mortgage rates

Employers added just 29,000 jobs in September — well below expectations — while the unemployment rate ticked up to 4.2%. July and August were also revised down by a combined 60,000 jobs. The soft report sent Treasury yields lower Friday morning and reduced market expectations for another Fed hike this month.

The 30-year fixed hit 7.28% for the week ending October 1, the highest in years. A meaningful pullback in rates would help buyers who were sidelined by payment math rather than desire — especially with inventory up, seller price cuts at a four-year high, and builders still offering rate buydowns.

2. FHA opens optional UAD 3.6 appraisal submissions starting now

FHA has opened its Electronic Appraisal Delivery portal to accept appraisals in the new UAD 3.6 format for all Title II forward and HECM loans, effective immediately.

Participation is optional — lenders can still submit in the legacy UAD 2.6 format — but once a format is chosen for a case number, it must be used for all subsequent submissions on that case.

The GSEs' mandatory UAD 3.6 transition date remains November 2, though they introduced a one-time waiver for lenders that can't meet the deadline, extending flexibility into mid-2027.

A MESSAGE FROM CHRIS JOHNSTONE

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3. More Nuggets

📝 USDA, HUD sign agreement to streamline affordable housing process. (Fox10)

🆕 The Loan Store rebrands as Averra Financial. (NMP)

🏦 Kevin Warsh’s Fed has a rent problem: Higher rates could fuel a ‘doom loop’ in housing, top economist warns. (Fortune)

4. 13.9 million homes will be released by aging owners over the next decade — but not the ones buyers need

Realtor.com projects Baby Boomers and the Silent Generation will vacate 13.9 million owned homes by 2036 as owners die, move to care facilities, or downsize.

That sounds like a supply windfall — but 71% of those homes are three- and four-bedroom family properties. Only about 380,000 are starter homes with two bedrooms or fewer.

The near-term benefit is more likely to flow to move-up buyers than first-timers. More family-home inventory gives existing homeowners somewhere to go — which could loosen the rate-lock grip that has kept so many of them in place.

If those moves happen, the smaller homes they leave behind could trickle down to entry-level buyers, but it's an indirect path.

Dive Deeper.

☀️ You’re all caught up. See you on Wednesday!

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