Housing Market Update and Economic News: July 31, 2025

No Rate Shift in July
The Federal Reserve left its benchmark interest rate unchanged during the July meeting, choosing a cautious path as it continues to monitor inflation and job market data. Some officials reportedly favored an earlier cut, but the majority opted to wait for clearer economic signals.

Fed Sees Cooling Activity, Persistent Risks
The central bank noted that while job growth remains strong, the overall pace of economic activity has moderated. Inflation, though no longer surging, is still higher than the Fed’s 2% target. Officials emphasized they will base future moves on evolving data and risk trends—not preset timelines.

What It Means for Mortgage Rates
Mortgage rates don’t move in lockstep with the Fed’s policy rate. Investors had largely anticipated this decision, so mortgage pricing remained stable. Going forward, rates are more likely to shift in response to market volatility, inflation reports, and global developments.

Should You Wait for a Rate Cut?
Maybe not. Home prices are continuing to rise in many markets. Even if rates dip later, a higher home price could cancel out savings. If you’re financially ready, locking in today’s rate may cost less than waiting.

Renters: Consider Your Opportunity Cost
Rent payments build no equity. With the right loan option, even a modest home purchase can help you start growing wealth and stability—sooner than you might expect.

Loan Strategies That May Help
Looking for flexibility? Consider a hybrid ARM for a lower starting rate. A temporary buydown can ease early payments. Some borrowers are also using HELOCs to fund projects without refinancing. Reach out to a Thompson Kane lending expert to discuss your ideal strategy.

Not Ready to Buy? Prepare Anyway
If you’re waiting for market conditions to shift, use the time wisely. Getting pre-approved or scheduling a planning call can give you an edge when the time comes.

Background on the Fed

How the Fed Influences the Economy
The Federal Reserve controls the federal funds rate and discount rate—tools that affect borrowing costs for banks. These, in turn, influence rates for credit cards, auto loans, and yes—mortgages indirectly.

What Sparked the Rate Hikes?
When inflation spiked in early 2022, the Fed began raising rates aggressively to counteract the causes of rising prices. After holding steady for much of 2023, they initiated cuts in late 2024 to stimulate slowing growth. As of July 2025, they remain cautious, trying to strike a balance.

“In investing, what is comfortable is rarely profitable.” — Robert Arnott

Whether you’re buying, refinancing, or just exploring, staying informed helps you make smarter choices. At Thompson Kane, we’re here to help you turn possibility into action.