By Greg Heym, Brown Harris Stevens Chief Economist and host of Crossing The Line

It's was a crazy week for markets throughout the world. Pour yourself a cup of calming herbal tea, and welcome to this week's edition of The Line.

Let's start from the beginning.

It All Began with Friday’s Jobs Report

After the weaker-than-expected July employment report, recession fears started spreading like wildfires. Stocks plummeted on Friday, with the Dow down 600 points.

While the jobs data was the match that lit the fire, there were other reasons for the panic, which included:

• Other disappointing economic data released last week that included the highest level of weekly jobless claims in a year, and an 8-month low in manufacturing activity.

• The Fed didn’t cut rates at their meeting earlier in the week.

• Concerns about corporate earnings, and stocks—especially certain tech stocks—being overvalued.

Stock losses were even worse on Monday, as U.S. markets followed a global selloff. The Dow, S&P 500, and Nasdaq all declined more than 2.5%, and the Dow finished down more than 1,000 points. The increased volatility lead investors towards bonds, which led to the lowest mortgage rates in over a year.

Things calmed down on Tuesday, and markets took off on Thursday after weekly jobless claims came in lower than expected.

So, what have we learned this past week?

• The stock market is ridiculously sensitive to any better-than or worse-than-expected data.

• Since about 70% of all stock market trades are executed by AI algorithms, markets can rise and fall at scary paces.

• While it’s normal to panic when stocks are tanking, that is not the time to start selling. Decisions made out of fear are always wrong.

• The best thing to come out of the past week was lower mortgage rates.

How Low Can They Go?

So, how low are mortgage rates? According to Freddie Mac, the average 30-year mortgage rate averaged 6.47% this week. That’s down from 6.73% the prior week, and the lowest reading in 15 months.

For all you would-be buyers out there who said they were waiting for rates to fall to 6.5%, now’s your time. You may say now you’re waiting until they’re below 6%, and I can understand that. Inflation is moving lower, and economic growth is slowing to the point where the Fed will start to cut rates next month. That said, rates are already 1.32% lower than their recent peak of 7.79% at the end of October 23.

All potential buyers out there should remember these two points:

1. 2021 was the only time 30-year mortgage rates fell below 3% since Freddie Mac started tracking them in 1971.

2. The average mortgage rate over the past 53 years has been 7.73%.

In conclusion, mortgage rates have declined quite a bit over the past three months. During that time, the inventory of homes for sale has risen sharply in most parts of the U.S. Add those two together and you get the best time to buy a home most markets have seen in four years.

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