July 25th, 2025 1:17 PM by T. Fanning
Good afternoon! I hope your week has been going well.
This week, the U.S. economy sent mixed signals. The services sector saw strong growth, while manufacturing activity declined. Jobless claims fell, pointing to continued strength in the labor market. Wages and business investment increased, and the stock market reached new highs. President Trump urged the Federal Reserve to cut interest rates, though inflation remains a concern. Meanwhile, mortgage rates edged down slightly.
Next week’s U.S. economic calendar is busy, with key reports on jobs, GDP, home sales, and consumer confidence. The Fed is expected to hold rates steady, but markets will watch for any future policy signals. Big tech earnings from Apple, Microsoft, Amazon, and Meta could also impact market sentiment.
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Last Updated: 7/25/25
Thursday's bond market has opened in negative territory following mixed economic data. Stocks are mixed with the Dow down 199 points and the Nasdaq up 12 points. The bond market is currently down 6/32 (4.40%), which should cause an increase of approximately .125 of a discount point in this morning's mortgage rates.
Yesterday's 20-year Treasury Bond auction went very well with the benchmarks we use to gauge investor demand pointing to a strong interest in longer-term securities. Since mortgage rates are based on long-term debt, we can consider the auction to be good news. Disappointingly, bonds had little reaction to the 1:00 PM ET results announcement. In other words, despite a strong sale, it failed to improve mortgage rates.
The first of this morning's two economic releases was last week's unemployment update that showed 217,000 new claims for unemployment benefits were made, down from the previous week's 221,000. Since analysts were expecting to see an increase in initial filings and declining claims are a sign of strength in the employment sector, today's release has to be labeled unfavorable for bonds and mortgage rates.
June's New Home Sales report was also released this morning, revealing a 0.6% rise in sales of newly constructed homes. This was a much smaller increase than expected, signaling the new home portion of the housing sector was not as strong as thought. Generally speaking, we can consider the report to be good news for mortgage rates. However, the report covers only a small portion of all home sales in the U.S. and doesn't carry a high level of importance. This is why it was unable to reverse this morning's bond weakness.
Tomorrow brings us the most important economic report of the week, even though it is not considered to be a key piece of data. June's Durable Goods Orders report tracks news orders for big-ticket products that are expected to last three or more years, such as airplanes, appliances and electronics. Weaker manufacturing activity is generally favorable for the bond market and mortgage pricing. Therefore, a larger than expected decline of 11.0% would be considered good news for rates. A note about this data is that it is known to be extremely volatile from month to month, so a moderate difference between forecasts and the actual reading may not move the markets or mortgage rates like it would if it came in other reports.
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.
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