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:
Interest rates for the week of June 20th to Jun 26th decreased slightly. Mortgage rates have recently dropped slightly, with the 30-year fixed rate falling to 6.85%, according to Freddie Mac. Despite this decrease, rates remain near 7%, and experts anticipate a gradual decline rather than a sharp drop, with rates potentially settling in the low to mid-6% range by the end of the year. The market is seeing increased refinance activity, but purchase applications remain hesitant due to the high rates.
Federal Reserve Board Chair Jerome Powell defends keeping the Federal Funds Rate steady in June. Saying the economy is solid, he is supporting a “wait-and-see” forecast until the full of expected tariff inflation passes through inflation and employment numbers over the next three months. The Federal Open Meeting Committee said July 19 it would keep the Federal Funds Rate at 4.25% to 4.50% for June.
Fed Watch: Target rate (in bps) possibilities, according to the CMEGroup (as of 06/26/2025 – 12:00 PM EST):
Market Review: Optimal Blue’s Production Metrics:
Home prices are increasing faster than incomes
Here's the income you need to afford a house in different metros - click hyperlink for your specific area
Homeowners Face a Stiff Penalty for Staying in Their Homes Too Long—a Hidden Home Equity Tax
NATO Numbers
Among the 31 NATO countries, the one spending the most on defense in 2024, as a percentage of GDP, at 4.12% was Poland, followed by Estonia at 3.43%. In third, the US at 3.38%, trailed by Latvia at 3.15%, then Greece at 3.08%, Lithuania at 2.85%, and Finland at 2.41%. Outside of the US and Greece, the other nations all border Russia or their satellite Belarus. Spain’s 31st at 1.28%. – Elliot Eisenberg, Economist
News You Can Use:
· Fannie Mae predicts crucial mortgage rate changes are coming soon
· The 9 metro areas with the fastest growing home prices in America
· NAR Pending Home Sales Report Reveals 1.8% Increase in May
*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 06/26/2025, 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 06/26/2025 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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