7/28/25 REcap: Is this the Biggest Week For Rates This Year?

Last week was a pretty calm week for rates. While there were a few pieces of housing market related data worth noting and one big trade deal announcement, it was mostly a prelude to the monster week of data coming in. The stock market notched another all time high. Trump and Powell put on a little more political theater (this time in person and wearing hard hats).

The average rate on a 30-year fixed rate conventional loan inched up again to 6.782% , but that's well above the rates we're offering in our Friday rate texts. 

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Nationwide Home Sales Are Down

Existing-home sales fell 2.7% in June, dropping to a seasonally adjusted annual rate of 3.93 million—the lowest since September 2024. At the same time, the median sale price hit a new all-time high at $435,300, up 2% year-over-year. The buyers that I'm working with are often opting to negotiate for high seller closing cost concessions instead of purchase price reductions - which might explain why purchase prices are stable. And while inventory has grown compared to last year, many sellers are pulling listings rather than reducing asking prices, betting on lower mortgage rates this fall to bring back competition. But as usual national data doesn’t tell the whole story—in the Austin market, closed sales were actually up 2.8% in June, showing that well-priced homes are still moving even as average days on market stretch out.

New construction isn’t having a great summer either. June new-home sales rose just 0.6%—well below forecasts—and builders are working harder than ever to attract buyers. We saw earlier this year that Lennar is slashing prices and providing higher incentives to lure buyers in 2025. Turns out PulteGroup, one of the nation’s largest builders, is doing the same.  “Sales incentives have grown to 8.7% of [gross sale price], more than double a ‘normal’ incentive load. I long for the days of more normal incentive loads of kind of 3% to 3.5%,” said CEO Ryan Marshall. While prices are softening, affordability remains a major barrier. The prolonged difficulty to sell houses might explain why we're seeing more and more big news in the build-to-rent space come up.

In fact, just last week, Taylor Morrison announced a HUGE $3 billion joint venture with Kennedy Lewis to aggressively expand its Yardly-branded build-to-rent communities in Texas, Florida, and beyond. 2 of the markets Yardley will be building in with it's new funds are Austin metro and Pflugerville. It’s the latest sign that institutional capital is flowing toward rentals, not listings. And while that may be great for investors and long-term cash flow, it’s a sobering signal for would-be homebuyers: more capital is chasing rent checks—not creating supply for owner-occupants. The silver lining is that potential homebuyers in the greater Austin area should feel more confident about their home purchase knowing that massive builders are coming back to investing and building in this market at these price points.

Trade Deals Bring Mixed Reactions

Trump and Powell met last week and it felt like something out of the HBO sitcom, VEEP.  Donning hard hats they spared over recent estimates of the Federal Reserve project renovations. Neither party really cares about the cost of course, they care about interest rates. 

This week Powell will certainly incur the full weight of Trump's anger if he opts to keep the Fed Funds Rate steady instead of cutting it. Markets believe Powell will stick to his guns as there's a 97% chance that rates stay steady. Of course, avid readers of this newsletter know that a cut to rates doesn't mean a drop in mortgage rates. What Powell says will have a bigger immediate impact on rates vs what the Federal Reserve does.

So, still don't hold your breath for a July cut on Wednesday but, September (the 1 year anniversary of the first rate cut) is still looking likely. 

A Fed Meeting on top of this week's labor reporting, PCE inflation reporting, and imminent trade deals means it's the biggest week for news we've seen this year. Hopefully, it ends up being a big win for homebuyers.

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