Hope you had a fabulous 4th of July weekend! As we celebrate the spirit of independence this July, it’s also a great time to reflect on your financial freedom, especially when it comes to your mortgage. Just as the Fourth of July reminds us of unity and progress, we’re seeing some interesting shifts in the housing and mortgage markets that could mean progress for you.
Mortgage Rates: Opportunities Emerge
Over the past few weeks, we’ve seen encouraging news for mortgage rates. According to Freddie Mac’s weekly survey, the 30-year fixed-rate mortgage (FRM) has generally been on a downward trend, reaching its lowest levels since early April. Just last week, the average for a 30-year fixed rate mortgage dropped by .10 percent, a notable decrease from the prior week and significantly lower, by .28 percent, from a year ago. This marks the fifth consecutive week of declines and the largest weekly drop since early March!
Freddie Mac’s Chief Economist, Sam Khater, noted that “Declining mortgage rates are encouraging and, while overall affordability challenges remain, we are seeing more sellers enter the market, giving prospective buyers an advantage.”
However, it’s important to be aware that this positive trend has seen a slight upward drift in the first few days of July, with the average top-tier 30-year fixed scenario rising. Despite this recent uptick, current rates are still lower than they were throughout most of May and June, remaining at their lowest levels since late April.
Refinance Activity Sees a Significant Surge
With rates dipping, we’ve seen a notable surge in refinance demand. According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey, overall application volume rose 2.7 percent recently, with unadjusted applications increasing by a substantial 13 percent!
Refinance activity led the charge, climbing 7% week-over-week and soaring 40% above the level seen during the same week last year. This increase was driven by a 10% jump in conventional applications and a 22% increase in VA refinance applications. The average loan size for refinance applications also rose to $313,700, indicating that borrowers with larger loans are capitalizing on these opportunities. The refinance share of total applications has now risen to 40.1%.
Understanding the Broader Economic Picture
Beyond mortgage rates, the overall economic landscape presents a dynamic picture. Stocks have reached new all-time highs recently. The Federal Reserve and Chair Jerome Powell continue to face scrutiny regarding interest rates, and the labor market remains stable. We’re seeing a steady state, without significant layoffs or robust hiring
Looking Ahead
As we move further into July, the economic calendar is lighter, but key events bear watching. The minutes from the most recent Federal Reserve meeting will offer deeper insight into the Fed’s views on the economy and future rate decisions. The expiration of a 90-day tariff pause on July 9th will also be a critical date, as it will reveal whether tariffs begin to impact prices and inflation.
I’m here to help you navigate these market shifts and explore how they might impact your mortgage needs. Whether you’re considering a refinance to take advantage of lower rates or are looking to purchase a new home, understanding these trends is key.
Please don’t hesitate to reach out if you have any questions or would like to discuss your specific situation. You’re welcome to send me an email or text/call me at 818.307.6072.
