Good morning friend,

“Rates are falling!” Maybe, but maybe not just yet. What we saw on Friday was encouraging, but it’s too early to breathe a sigh of relief. After the volatility of the past few years, I’ve learned to be a little cautious. Markets can swing sharply in one direction, only to reverse just as quickly.

Powell signaled a policy shift ahead, and bonds rallied in response. The Fed Minutes, released last week, provided more context. The Fed held steady at their last meeting, but for the first time in decades, two officials dissented, calling for a cut. They pointed to slowing growth, weaker housing investment, and inflation (excluding tariffs) running close to target.

Here’s the bigger picture: inflation is stuck at 2.8%, tariffs are causing one-off price bumps, and while the labor market looks steady, early cracks are showing. The Fed is cautious but ready to pivot if the data keeps softening.

Which brings us to this week. Thursday’s jobless claims report could be pivotal. It may reinforce expectations for a September cut or put it in jeopardy. Last month’s report shocked markets, and a repeat would strengthen the case for cuts. That could eventually push mortgage rates lower, or leave us stuck in the same pricing limbo we’ve been navigating for the past couple of years.

Mortgage Rates ↘️

Despite the noise, mortgage rates are essentially flat from last week. Thursday could be the catalyst for the next real move, stay tuned friends.

The national average for 30 year fixed conventional is sitting at 6.52% according to Mortgage News Daily. (Keep in mind, this is assuming 25% down, perfect credit, single family home with on average a one point buydown).