Fed Stands Firm, But Two Trump Appointees Cast Dissenting Votes

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Powell Withstands Administration Pressure

The Federal Reserve just delivered its fifth consecutive "nope" to rate cuts, keeping the benchmark rate locked at 4.25%-4.5% on July 30. But here's the plot twist: two of Trump's own Fed appointees broke ranks.

For the first time in three decades, Fed Governors Michelle Bowman and Christopher Waller cast dissenting votes, pushing for a quarter-point cut. That's rare air in Fed land.

The internal drama signals just how intense the pressure has become. Trump's been publicly hammering for immediate cuts to juice the economy, but Chair Powell and the majority are sticking to their guns.

Their reasoning? Inflation's still lurking, and the job market remains surprisingly strong. Translation: the economy can handle these higher rates without breaking.

What this means for you: 30-year mortgage rates are still camping out around 6.7%. Buyers are still facing elevated borrowing costs, and that refinance business isn't coming back anytime soon. Market watchers expect maybe one rate cut before year-end, assuming no major economic curveballs.

Housing Market Could be Stuck Until 2026

Ready for more good news? The housing market is officially stuck in neutral until 2026, according to Bright MLS chief economist Lisa Sturtevant. Both buyers and sellers are playing the waiting game.

The numbers back up the standstill. Pending home sales dropped 0.8% in June compared to May, and fell 2.8% year-over-year. NAR's Lawrence Yun summed it up perfectly: "high mortgage rates are causing home sales to remain stuck at cyclical lows".

Here's what's happening on both sides of transactions:

Buyers are sitting tight, waiting for rates to drop. Even with more inventory hitting the market, demand remains sluggish. Affordability is the killer.

Sellers are equally stubborn. Rather than accept lower prices, many are pulling listings off the market. Why sell at a discount when you can wait?

Even if rates dip to 6.4% by year-end as Realtor.com predicts, that's still not enough to unlock meaningful activity.

The broader economy isn't helping either. We're in a "slow hire, slow fire" job market phase that's keeping everyone cautious.

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More You Should Know

• Inventory Rises, Aids Buyers: National housing inventory has increased 27% year-over-year, with new listings up 3.8% and homes staying on the market longer (median 54 days), gradually empowering buyers with more negotiating leverage. [Source]

• Construction Job Growth Stagnates: The construction sector saw historically weak job growth in July, adding only 2,000 positions, as nonresidential construction gains were offset by losses in residential construction. [Source]

• Core Real Estate Funds Surge: The NCREIF Fund Index reported its highest one-year return since Q4 2022. [Source]

• Homes Selling Slower: July Trend: The typical home spent 58 days on the market in July, a seven-day increase from last year, marking the 16th consecutive month of longer selling times and signaling a shift in the housing market. [Source]

• Mortgage Rates See Slight Dip: Following the Federal Reserve's decision, the average 30-year fixed mortgage rate saw a slight decline to 6.72% for the week ending July 31, as Freddie Mac reported, fostering more balanced conditions for both buyers and sellers in the housing market. [Source]

• Home Price Cuts Widespread: In July, 20.6% of home listings nationwide saw price reductions, with the South and West experiencing a higher proportion of cuts compared to the Northeast, and Denver leading major metros in price reductions. [Source]

• Mortgage Applications Decline Despite Rates: Despite improved mortgage rates, overall applications saw a week-over-week decline, as economic and job market uncertainties continue to deter prospective homebuyers, according to the Mortgage Bankers Association. [Source]

• Housing Inventory Climbs, Pace Slows: U.S. active housing inventory marked its 21st consecutive month of growth in July, reaching over 1.1 million homes for sale nationwide, despite a decelerating pace of year-over-year increase. [Source]

• Home Insurance Costs Soar: Home insurance premiums for new policies surged 9.3% to an average of $1,966 in the first half of 2025, with costs outpacing coverage value significantly since 2022 primarily due to increased climate volatility and convective storms. [Source]

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