Mortgage rates remain below 3% for the eighth consecutive week, but economists believe job growth will determine how much longer they’ll likely stay so low. The 30-year fixed-rate mortgage averaged 2.87% this week, Freddie Mac reports.

“Job growth seems to be very critical for the following several months as it will indicate when the Fed’s tapering will likely start,” Nadia Evangelou, a senior economist and director of forecasting for the National Association of REALTORS®, writes for the association’s blog. “There is ample talk about the Fed cutting its monthly bond purchases before the end of the year.”

The Fed’s asset purchases have helped keep rates lower than they otherwise would be, Evangelou adds. “Expect mortgage rates to rise further when the Fed will raise interest rates since rising interest rates increase the cost of mortgages,” she notes. But “that won’t likely happen until the economy hits full employment.”

Nearly 1.9 million jobs were added during June and July. However, only 235,000 jobs were added in August. Approximately 17 million have been recovered since lockdown in April 2020, but another 5 million are still needed to reach the country’s prior peak before the pandemic, says Lawrence Yun, NAR’s chief economist.

The latest unemployment rate was 5.2% with wages rising by 4.8% over the year, Yun says, however, the consumer price inflation of 5.2% is “eating away at those wage gains.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Sept. 2:

• 30-year fixed-rate mortgages: averaged 2.87%, with an average 0.6 point, unchanged from last week. Last year at this time, 30-year rates averaged 2.93%.
• 15-year fixed-rate mortgages: averaged 2.18%, with an average 0.6 point, rising slightly from a 2.17% average last week. A year ago, 15-year rates averaged 2.42%.
• 5-year hybrid adjustable-rate mortgages: averaged 2.43%, with an average 0.3 point, increasing from last week’s 2.42% average. A year ago, 5-year ARMs averaged 2.93%.

Freddie Mac reports average commitment rates along with average points to better reflect the total upfront cost of obtaining a mortgage.