Welcome to our Market Update, written by our very own Capital Market experts. This blog is designed to give you a glance into the most important market events happening this week.
Market Commentary:
The Federal Reserve is meeting again in September to discuss the future of the federal funds rate, to help manage inflation and employment, which could have an impact on mortgage rates. Mortgage rates, fragile builder sentiment, and a Fed still wary of easing policy on the other. mortgage experts believe that if and it's always an if the Fed slashes rates in September, the difference in mortgage rates may be negligible. But for the rest of the fall, they're inclined to believe that rates may trend downward. Obviously, many factors can impact mortgage interest rates. Jerome Powell, the head of the US central bank, has given a rocket boost to expectations that there will be an interest rate cut in September, a move President Trump has been demanding for months.
Mortgage rates and demand remain stuck:
· The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $806,500 or less, remained at 6.74%
· Applications to refinance a home loan fell 4% for the week and were 19% higher than the same week one year ago.
· The average purchase loan size rose to $433,400, the highest in two months.
Fed Watch: Target rate (in bps) possibilities, according to the CMEGroup:
Market Review: Optimal Blue’s Production Metrics:
Best Quarter for Custom Home Building in Almost Two Years
Houses don’t stay on market long in these hot ZIP codes
Weakening Work
For the year ending 3/24, estimated job growth has been preliminarily revised down by 818,000, bringing average job growth down from 242,000/month to 174,000/month. The revision is based on data from state unemployment insurance tax records, not low response rate monthly surveys. But this data doesn’t include illegal immigrants, and this data also gets revised. Bottom line, the economy’s somewhat weaker, and that’ll increase the likelihood of Fed rate cuts. - Elliot Eisenberg, Ph.D. , Economist
News You Can Use:
· 59% of Americans wrongly think the U.S. is in a recession, report finds
· Fed's Bostic downplays recession fears
· The residential property investor’s demise has been greatly exaggerated
· New Fannie forecast revises rates downward — but why do sales drop too?
· A U.S. construction boom is sending rents lower and creating perks for renters
· One-third of home builders are slashing prices as confidence in the market falls to 8-month low
· This common credit score myth could hurt your score, says FICO expert
· A Data Profile of NAHB Remodelers
*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 08/28/2025, 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 08/28/2025 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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