Mortgage Rates Pause, Waiting for Fed Decision

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News Flash

Rates Play Dead While Everyone Waits for the Fed

Mortgage rates decided to take a breather this week. The 30-year fixed-rate mortgage barely budged at 6.74%, down just one basis point from 6.75% the week prior.

The 15-year also took a tiny dip to 5.87% from 5.92%. For perspective, we were sitting at 6.95% a year ago.

This calm comes right before the Fed's July meeting. Everyone's watching to see which direction Jerome Powell & Co. will push rates next.

Sam Khater from Freddie Mac noted that "mortgage rates moved very little this week, despite a modest uptick in 10-year Treasury yields".

Translation: Other market forces are keeping things in check.

But Despite High Rates, Mortgage Applications Increased

Plot twist: Mortgage applications actually increased 0.8% for the week ending July 18, even as rates climbed to 6.84% - their highest level in a month.

Purchase applications drove the increase while refinances dropped nearly 3%. No surprise there - who's refinancing into higher rates?

The interesting part? Average purchase loan amounts fell to $426,700, the lowest since January.

This tells you buyers are adapting. They're either:

• Going for cheaper homes

• Getting smaller loan approvals

• First-timers are making up more of the market

The takeaway? Your clients are still motivated to buy, they're just being more realistic about what they can afford.

The mortgage market is showing resilience even as rates hover near multi-year highs. Whether this continues depends on what the Fed signals next week. But right now, buyer demand is proving stickier than many expected.

Sources: [Source], [Source], [Source], [Source]

More You Should Know

• Starter Home Sales Rise: Despite median starter home prices hitting a record high of $260,000, sales of starter homes rose 3.9% year-over-year in June 2025, reaching their highest level since June 2023, though regional trends varied. [Source]

• Fannie Mae Lowers Housing Outlook: Fannie Mae's latest forecast anticipates a slowdown in the housing market, revising downward its projections for mortgage rates to 6.4% in 2025 and 6.0% in 2026, alongside reduced home price growth expectations of 2.8% for 2025 and 1.1% for 2026. [Source]

• VA Loan Reforms Boost Vets: The newly passed VA Home Loan Reform Act of 2025 empowers veterans to directly compensate real estate agents, establishes a partial claim program to avert foreclosures, and significantly increases funding for homeless veterans. [Source]

• Housing Sees Slowest Spring in 13 Years: The U.S. housing market experienced its worst spring selling season in 13 years, with pending home sales sharply declining due to ongoing affordability challenges, high mortgage rates, and broader economic uncertainty. [Source]

• Hotel REIT Transactions Decline: Hotel transactions involving REITs as sellers saw a 9% decline in the first half of 2025, reaching approximately $626 million across 26 deals, signaling broader challenges and shifting investment patterns within the hospitality real estate sector. [Source]

• Permits Fall, Construction Weakens: U.S. building permits declined in July 2025, primarily driven by a significant drop in single-family permits to their lowest level since 2020, signaling ongoing weakness in the housing construction sector due to high mortgage rates and affordability challenges. [Source]

• Nonresidential Construction Slowdown Continues: Nonresidential building spending is projected to see minimal increases through 2026, with manufacturing declines offsetting modest growth in institutional facilities, as high interest rates, inflation, and labor shortages persist. [Source]

• Home Price Growth Slows: The S&P CoreLogic Case-Shiller Home Price Index indicated the slowest annual price growth in over 13 years for the 20 largest U.S. metros, registering a 1.8% increase in May 2025, reflecting weakening demand and increased inventory. [Source]

• Anywhere Real Estate Revenue Up: Anywhere Real Estate reported a modest revenue increase to $1.7 billion in Q2 2025, buoyed by improving volume trends observed in June and July despite overall flat closed transaction volume. [Source]

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