This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.
Market Commentary:
Mortgage rates remained largely flat during the week of July 25th–31st , hovering slighter under 7% for 30‑year fixed loans, as subdued Treasury yields and a steady market backdrop limited movement despite recent economic data. At the same time, the Federal Reserve held its benchmark rate at 4.25%–4.50% on July 30,choosing not to lower rates amid ongoing inflation and political pressure. Meanwhile, the Q2GDP report showed U.S. growth rebounding at an annualized 3%, buoyed by softer imports and modest consumer spending—though investment and exports remained weak. The durable goods and JOLTS data added nuance: durable goods orders remained volatile, while job openings stayed elevated, reflecting a tight labor market but also suggesting cautious hiring amid slowing business investment.
Commentary from Fed Chair Jerome Powell on July 30th, 2025, in commentary after the fed elected to make no changes to rates:
“Housing is a special case. We don’t set mortgage rates at the Fed; we set an overnight {short-term} rate and the rates that go into mortgages are longer term rates… It isn’t that we don’t have any effect on rates, we do have an effect but we’re not the main effect.”
“There are other things going on in the housing sector. And one of those is just that there is a long-term housing shortage that we haven’t built enough housing. This is not something the Fed can help with. And that’ll be the case even after things normalize. So, I think the best thing we can do for housing is to have 2.0% inflation and maximum employment. And that’s what we can contribute to housing"
30 Year Mortgage Rate Projections as of 07/24/2025
Fed Watch: Target rate (in bps) possibilities, according to the CMEGroup (as of 07/24/2025 – 12:00 PM EST):
Homebuyers Can Save $200K by Building a New Home Instead of Buying an Existing One in this State.
NAR: Pending Home Sales Decrease 0.8% in June; Down 2.8% Year-over-Year
Case-Shiller: National House Price Index Up 2.3% year-over-year in May
Housing Market Forecast for the Rest of 2025
Zillow Updates Home Price Forecast for Over 400 Housing Markets
Dwelling Depreciation
Home prices fell 0.34% in May, the third straight M-o-M decline. Y-o-Y price appreciation has declined from 4.7% in January, to 4.5% in February, 4.1% in March, 3.4% in April, and 2.8% in May, barely ahead of inflation. Seasonally adjusted, prices are now lower than they were in 12/24. Absent a sharp decline in rates, or a strong rise in income growth, prices are likely to keep falling. – Elliot Eisenberg.
News You Can Use:
· Fed’s Powell sticks with patient approach to rate cuts.
· U.S. economy grew at a3% rate in Q2, a better-than-expected pace even as Trump’s tariffs hit
· NAR: Pending Home Sales Decrease 0.8% in June; Down 2.8% YoY.
· Housing Market Forecasts for the Rest of 2025
· Zillow updates home price forecast for over 400 housing markets: See the map
· Homebuyers Can Save $200K by Building a New Home Instead of Buying an Existing One in This State
*Communication is intended for Industry Professionals only and not intended for Consumer Distribution
Interest rate and annual percentage rate(APR) are based on current market conditions as of 07/30/2025, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Prosperity Home Mortgage, LLC. Not available in all states. Rate is as of 07/30/2025 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac’s economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac’s business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.
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