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Why the stock market meltdown could be good news for YOU - and millions more Americans
News of rising unemployment last week fired up fears of a US recession - causing a stock market crash.
That series of events might seem wholly negative.
But the knock-on effects over the past week have provided Americans with two silver linings, which are glowing even brighter now recession worries have receded.
Already, mortgage rates have fallen to the lowest level since May 2023 - and are tipped to drop more. It is a boost for those looking to buy or refinance pricier loans.
In addition, stock prices falling from highs can provide investors with a chance to buy once the mayhem has settled down - though experts warn the markets are likely to remain choppy for now.
The stock market sunk on Friday after investors were spooked by data showing dwindling job growth and rising unemployment
Bad economic news - such as Friday's disappointing jobs report and the stock market meltdown later that day and again on Monday - makes it more likely that the Federal Reserve will cut interest rates.
Wall Street is worried that the bad jobs numbers prove the Fed has dithered in cutting borrowing costs - leaving them too high for too long and risking a recession. They had been hiked to curb inflation.
It is now seen as a certainty that the Fed will begin cutting rates in September, which could see mortgage rates start to fall further.
Benchmark borrowing costs do not directly affect mortgage rates, but home loan costs will dip when banks think a future cut is likely.
Last week's bad news sent mortgage rates plunging for that reason.
The average 30-year home loan fell to 6.55 percent in the week ending August 2, according to Mortgage Bankers Association data, reaching the lowest level since May 2023.
Economists surveyed by FactSet now overwhelmingly predict the Fed will trim rates by 0.5 percentage points in September - double the prior forecast of 0.25 percentage points.
Applications to refinance a home loan also jumped nearly 16 percent last week, according to the Mortgage Bankers Association (MBA).
Joel Kan, MBA's vice president and deputy chief economist said that despite mortgage rates dropping, Americans looking to buy only rose slightly. He thinks homebuyers are biding their time as they wait for even lower rates.
Thomas Ryan, economist at Capital Economics, said in a note that the decline in rates should boost home sales, Bloomberg reported.
'We think this marks a turning point for the housing market, which has been frozen for a while now,' he added.
The average 30-year fixed rate mortgage fell to 6.55 percent in the week ending August 2, according to Mortgage Bankers Association data
It is now seen as a certainty that the Federal Reserve will begin cutting interest rates in September, after keeping borrowing costs steady for a year
Elevated mortgage rates have been a deterrent for homebuyers for the last several years, alongside high property prices and a shortage of homes for sale.
While average rates coming down is good news, experts warn that they would need to decrease further to really relieve the housing affordability crisis.
As a general rule, experts say that an average 30-year mortgage rate of 6 percent or below is needed to give consumers more selling and buying power.
'I think 6.5 percent I'd feel good about … but the magic number is 5.9999,' Robert Reffkin, cofounder and chief executive of Compass, said earlier this year.
'That'd be marketing magic, and would tell the world that mortgage rates are at a level where they should go and grab a property.'
Meanwhile, stocks slipped again on Wednesday after a so-called Turnaround Tuesday rally.
'It could be that investors are sitting on the sidelines due to market volatility... you wait for stability before wading back in,' Chad Oviatt, head of investment at Huntington Private Bank, said.