The mortgage market has been a hot topic lately, and for good reason. It’s a dynamic environment, and staying informed is key to making the best decisions for your financial future. This past week saw relatively calm waters for interest rates, but don’t let that fool you—we’re heading into a period packed with potential market-moving events.
What’s Happening with Rates?
As of Freddie Mac’s latest survey of average mortgage loan rates, the 30-year fixed-rate mortgage (FRM) held steady, only a hair down from last week’s rate. To put that in perspective, it is just a hair lower than what it was at this same point last year. The 15-year FRM also saw a slight dip. These rates reflect a period of what we call “consolidation,” where rates have largely been moving sideways for the better part of nine months. This stability is good news, as it helps ease some of the volatility we’ve seen in the past.
While Monday was quiet, don’t expect that trend to continue. The coming days are set to bring a flurry of significant announcements that could either keep us in this sideways pattern or trigger a breakout.
Key Events on the Horizon: July 30th is Pivotal
Mark your calendars for July 30th, as it’s shaping up to be a critical day for the markets. We’re expecting two major announcements:
• The Federal Reserve’s Monetary Policy Statement: The Fed is meeting for two days this week and will make their policy announcement on Wednesday afternoon. Everyone is watching to see what they will say about the economy and inflation. While a rate cut is unlikely this week, positive inflation data could pave the way for a September cut. Rest assured, fears of aggressive rate cuts sparking inflation seem to be fading, which could bring short-term stability to long-term rates like mortgages. And for those wondering, a change in Fed leadership is highly improbable.
• The Quarterly Refunding Announcement (QRA): This is where the U.S. Treasury outlines its bond sales for the upcoming quarter. There’s buzz that Treasury Secretary Scott Bessent might announce a significant reduction in sales of long-term debt (like 10-year notes and 30-year bonds). If this happens, it could boost bond prices and help lower yields, which is good news for mortgage rates. Conversely, an increase in long-term debt sales could have the opposite effect. The bond market is keenly focused on our ability to manage deficits and debt, as this directly impacts long-term rates.
Beyond July 30th, this week brings more market-moving reports, including the Fed’s preferred inflation measure (Core PCE), the July Jobs Report, JOLTS data (which tracks job openings, hires, and quits), and GDP figures. All of these play a role in shaping the economic landscape and, by extension, mortgage rates.
The Housing Market: A Shift Towards Buyers?
The housing market is showing signs of rebalancing, slowly tilting in favor of buyers. Realtor.com’s latest forecast suggests that existing-home sales for 2025 could be around 4 million, which would be the lowest level in three decades—even lower than 2024’s 4.06 million. This is a significant shift from the 2013-2019 average of 5.28 million sales.
However, there’s some cautious optimism:
• Moderating Home Prices: While still climbing, the median home price is expected to grow by 2.5 percent this year, a notable slowdown from 4.5 percent in 2024.
• Easing Mortgage Rates: A slow decline in mortgage rates is anticipated through the end of the year, potentially bringing more transactions to market by year-end. Even a small dip in rates can make a difference—a modest decrease could save nearly $70 per month on a $350,000 loan, or roughly $830 annually.
• Increased Inventory: Home supply is moving into a more balanced territory, with inventory climbing 16.9 percent year-over-year. This is great news for buyers, offering more choices. However, this trend isn’t uniform across the country, with “hotter” competition still present in the Northeast and Midwest, while the South and West are seeing more price adjustments. It’s also worth noting that not all sellers are budging, and “delistings” (homes removed from the market without a sale) are up, which could dampen supply.
Economic Conditions and What It Means for You
The broader economic picture remains relatively stable, with unemployment edging down to 4.1 percent and inflation holding steady in the 2-3 percent range. The Fed has maintained its policy rate throughout 2025 after a full percentage point cut at the end of 2024.
For those considering a home purchase, while affordability remains a challenge, the increase in home supply and the potential for slightly lower rates could create opportunities. Additionally, recent policy changes like the increased SALT (State and Local Tax) deduction cap could offer relief to homeowners in high-tax states.
We’re here to help you navigate these market shifts and understand what they mean for your homeownership goals. Whether you’re looking to buy, sell, or refinance, we’re committed to providing you with the latest insights and personalized guidance.
Ready to discuss your unique situation and how these market trends might impact your mortgage options? Feel free to reach out anytime! Ready to discuss your unique situation and how these market trends might impact your mortgage options? Feel free to reach out anytime! You can send me an email or text/call me at 818.307.6072.
