Mortgage rates increased by another six basis points last week according to the Freddie Mac Primary Mortgage Market Survey as of July 16th. This puts the 30-year fixed rate at its highest point since late August 2025. Although purchase application demand has weakened recently, housing affordability is more favorable and housing inventory continues to rise, thus the backdrop for prospective homebuyers is modestly improving.
Mortgage applications decreased 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 10th. “Mortgage applications declined as the 30-year fixed rate increased to its highest level since August 2025. Purchase applications were down over the week and dipped below last year’s pace in the week following the July 4th holiday,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Despite higher mortgage rates, refinance applications increased.”
Consumer prices posted their biggest decline in more than six years during June as a sharp swoon in energy prices provided at least temporary relief from this year’s inflation surge, the Bureau of Labor Statistics reported Tuesday. The consumer price index was lower than expected across the board. The CPI fell a seasonally adjusted 0.4% for the month, bringing the annual inflation rate down to 3.5%. The monthly decline in headline inflation was the biggest since April 2020. “June finally brought some relief on inflation,” said Heather Long, chief economist at Navy Federal Credit Union. “This takes the pressure off the Federal Reserve and allows the central bank to wait and see what happens. The concern is that this relief will be short-lived as the war in Iran re-starts. It’s too uncertain to know how the inflation story ends.”
Spending at US retailers last month was weaker than expected, despite the World Cup drawing tourists from around the world and online sales events. Retail sales rose 0.2% in June from the prior month, the Commerce Department said Thursday, down sharply from May’s revised 1% increase. The World Cup and Amazon’s Prime Day sale helped boost spending last month, according to economists. “Despite challenges, consumers are still spending and the labor market shows no signs of cracking,” Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, wrote in commentary issued Thursday. “This type of data won’t move the Fed’s needle either way, but it underscores the ongoing resilience of the US economy.”
