This week, weekly mortgage rates have remained relatively stable. According to data provided to BW by Zillow, the average 30-year fixed-rate mortgage increased by one basis point to 6.85% for the week ending July 30. It’s important to note that a basis point represents one one-hundredth of a percentage point.
The Federal Reserve recently decided to keep short-term interest rates unchanged as they continue to adopt a “wait-and-see” approach. This decision is likely to keep mortgage rates stable in the near future.
The Fed’s decision was influenced by the lack of recent data, including the upcoming release of the Personal Consumption Expenditures Price Index and the latest jobs report. Without sufficient data to guide their decision-making, the Fed opted to maintain the status quo.
Looking ahead, if incoming data indicates a cooling trend in inflation, there is a possibility of a 25-basis-point rate cut in September. This could lead to a decrease in mortgage rates in the coming weeks as lenders adjust their offers accordingly.
Watch: Fed Rate Decision
Potential barriers to a September rate cut
While there is speculation about a rate cut in September, uncertainties remain. The Fed may refrain from making changes if there is insufficient data to assess the trajectory of inflation and unemployment. Evolving monetary policies and trade issues could also complicate the decision-making process.
The implementation of new tariffs and ongoing trade negotiations could impact economic conditions. The effects of these factors on inflation and overall economic stability need to be carefully considered before any rate adjustments are made.
Additionally, upcoming earnings reports from key tech companies will provide insights into the strength of the financial markets. These factors will play a crucial role in shaping investor sentiment and market trends.
Explore mortgages today and get started on your homeownership goals
Get personalized rates. Your lender matches are just a few questions away.
Why you’re hearing more about the Fed
Recent news coverage has focused on the Federal Reserve due to President Trump’s calls for lower interest rates, specifically targeting Chair Jerome Powell. While lower rates may seem beneficial to borrowers, the Fed has valid reasons for maintaining current rates to balance inflation and employment concerns.
The Fed aims to manage inflation without negatively impacting employment levels. Lowering rates can increase the money supply, potentially leading to inflationary pressures. Therefore, the Fed must carefully consider the implications of rate cuts on the overall economy.
While lower interest rates may offer immediate benefits to borrowers, the Fed must prioritize long-term economic stability over short-term gains. Central bankers understand the complex interplay of economic factors and the importance of making informed decisions to safeguard the economy.