August 1st, 2025 2:37 PM by T. Fanning
It’s hard to believe it’s already August—this year is flying by! Hope you're having a great day!
This week, the U.S. economy sent mixed signals. GDP grew around 3% in the second quarter, but July’s jobs report stole the spotlight—only 73,000 jobs were added, and unemployment rose to 4.2%. The Fed kept rates unchanged, but for the first time in over 30 years, two Fed governors dissented, calling for a cut. After the weak jobs numbers, the chances of a September rate cut rose sharply. Mortgage rates held steady early in the week but dropped after the report, ending the week lower.
Next week has only a few economic reports, and none are as important as this week’s. Factory Orders come out Monday, but they likely won’t impact mortgage rates. There are also two midweek Treasury auctions that could affect rates. Now that the Fed meeting is over, we’ll also hear from several Fed officials throughout the week.
We offer traditional Conventional, FHA, VA, USDA, Jumbo. Some of the other programs we offer include: First-time Homebuyer loans; HomePossible and HomeReady programs; Custom term loans; HomeStyle and FHA 203k renovation financing; Construction financing; Chenoa Fund loans (100% FHA financing); Conventional, FHA and VA 1x Close Construction-Perm loans; 1.50% Down FHA Advantage Program; CHFA Financing; Modular and manufactured home financing; 10% down Jumbo loans; DSCR loans; Bank Statement loans; Asset-based loans; Non-Warrantable Condos; Interest Only loans; Lot loans; Second mortgages (fixed or HELOC) on primary, second and non-owner occupied residences; Reverse mortgages; and more! To see a detailed list of programs, visit our website: www.homeloanmortgageco.com/mortgageprograms
Last Updated: 8/1/25
Friday's bond market has opened sharply higher following this morning's employment news. Stocks were already set for a negative open due to President Trump's tariff announcement last night but have extended those losses after today's data. The Dow is now down 772 points while the Nasdaq has lost 543 points. The bond market is currently up 34/32 (4.23%), which should improve this morning's mortgage rates somewhere between .375 and .625 of a discount point.
The most influential of this morning's three economic reports was July's Employment report at 8:30 AM ET. It revealed the U.S. unemployment rate rose from June's 4.1% to 4.2% last month, as it was expected to do. The big news came in the payroll numbers. They showed only 73,000 new jobs were added to the economy, falling short of the 100,000 that was expected. Furthermore, June and May's payroll numbers were revised lower by a combined 258,000 jobs, indicating the economy had added far fewer over the past three months than analysts thought. As a clear sign of weakness in the employment sector, this data is extremely good news for bonds and mortgage rates. It also raises the chance of the Fed cutting key rates at September's FOMC meeting after it dropped following Wednesday's FOMC events.
The third headline number in the report was average hourly earnings that rose 0.3% for the month. This matched forecasts. However, year-over-year earnings rose 3.9% when analysts predicted 3.7%. Rising earnings fuel inflation by giving consumers more money to spend and causes businesses to pass on those costs to consumers in the prices of their products and services. Not that it shows in this morning's bond trading, but this portion of the report is bad news for bonds and mortgage pricing.
Next up was the release of July's manufacturing index from the Institute for Supply Management (ISM) at 10:00 AM ET. It also gave us favorable results with a reading of 48.0. This was a decline from June's 49.0 and well below forecasts of 49.5. The lower reading means fewer surveyed manufacturing executives felt business conditions improved during the month than did in June. Since this is a sign of a slowing manufacturing sector, the data is good news for rates.
The least influential of this morning's reports was July's revised University of Michigan Index of Consumer Sentiment, also late this morning. They announced a reading of 61.7 that was a modest revision from the initial estimate of 61.8. This data surveys consumers about their own financial situations, giving us an indication of willingness to spend. It was not enough of a change to become relevant in this morning's bond trading or mortgage pricing.
Next week has just a few relevant economic reports set for release and none of them are nearly as important as some of this week's data. The week will start with the release of June's Factory Orders report late Monday morning, but it shouldn't have a noticeable impact on mortgage rates. In addition to the data, next week has two Treasury auctions that may affect rates during afternoon trading midweek and now that the FOMC meeting is behind us (and the Fed's quiet period), we will get plenty of Fed-member speeches in the coming days. Look for details on all of next week's mortgage-relevant activities in Sunday evening's weekly preview.
If I were considering financing/refinancing a home, I would....
Lock if my closing were taking place within 7 days...
Lock if my closing were taking place between 8 and 20 days...Lock if my closing were taking place between 21 and 60 days...Lock if my closing were taking place over 60 days from now...
This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
Company NMLS ID: 479289 | LO NMLS: 208694
CO License: 100008854
FL Company License: MBR4416 | FL License: LO89221
Regulated by the Colorado Division of Real Estate
www.nmlsconsumeraccess.org
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.