This Week in Housing & Rates
What to Watch
Powell Speaks (Tue).
Fed Chair Jerome Powell’s remarks will be combed for guidance on growth, inflation, and policy direction. A hawkish tone tends to lift Treasury yields and mortgage rates; a dovish tone can do the reverse. Expect consistency with his recent press conference—no major policy shift is likely.
August New-Home Sales (Wed).
A read on buyer demand and confidence in the builder market. Stronger sales can stoke inflation concerns and push yields up; softer results generally support bonds and ease rate pressure.
August Durable Goods (Thu).
Orders for long-lived goods track industrial momentum. Firm orders imply resilience (and potentially firmer policy); weak orders temper rate-hike expectations and often help mortgage rates.
Q2 2025 GDP (Thu).
Broad growth scorecard. Expectations hover near 1.6% annualized. By definition, a recession involves contraction, so the direction of travel here matters for rate expectations.
August Existing-Home Sales (Thu).
A direct look at affordability and demand in the resale market. Strong prints can complicate disinflation. The Fed isn’t targeting housing specifically, but policymakers are watching the knock-on effects.
August PCE Inflation (Fri).
The Fed’s preferred inflation gauge. Hotter-than-expected PCE tends to nudge mortgage rates higher; cooler readings relieve pressure.
Base Case: Economists expect a mild cooling from July. If confirmed, that’s modestly supportive for mortgage rates this week.
Market Snapshot: Summer 2025’s Brief Buyer Window
Summer 2025 produced the most buyer-friendly backdrop in over a decade: roughly 35% more sellers than buyers nationwide. That imbalance delivered unusually strong negotiating leverage to buyers but it’s unlikely to persist if rates drift lower and sidelined buyers re-enter.
Buyer activity sits near 2013 lows due to high prices and elevated rates; recent rate slippage is improving sentiment.
Florida and Texas showed the most pronounced buyer advantage; parts of the Northeast (e.g., Newark, Nassau County) remained seller-leaning.
Buyer’s markets are historically short-lived. As affordability improves, leverage normalizes. Timing the inflection precisely is a fool’s errand.
Highlights
August featured ~506,000 more sellers than buyers—the widest gap in 10+ years.
Active buyers near 1.4 million, close to pandemic-era lows.
Sub-6% mortgages could reawaken demand quickly.
About 50,000 sellers have exited since May amid fatigue and costs.
Several metros (Denver, Las Vegas) are sliding toward balance.
Local note (SF/Bay Area). Inventory is moving faster again after a soft patch. Rate optimism is drawing buyers off the sidelines, and well-priced homes are selling decisively.
Bottom line: The buyer advantage was real, but fragile. If rates continue easing, expect the pendulum to swing back toward balance.
Lawsuit Watch: Zillow’s Premier Agent & Flex
A new lawsuit alleges Zillow’s Premier Agent and Flex programs mislead consumers about agent relationships and keep commissions elevated, with claims that “contact agent” directs to Zillow-affiliated agents rather than listing agents and that Flex participants can remit up to 40% of their commission to Zillow without clear buyer/seller disclosure. Zillow denies wrongdoing and defends its platform as consumer-friendly; the suit seeks class-action status.
Practical takeaways for buyers
Transparency around fees and affiliated services matters.
Going directly to the listing agent isn’t a shortcut to a better price; most listing agents avoid dual agency and will refer you out to limit conflicts.
Buyer Readiness Checklist
Underwritten Approval (Not a Pre-Qual).
A true underwrite (often achievable in 24–72 hours with a seasoned lender) sets realistic budget guardrails and strengthens offers.Experience Matters.
Aim for agents with 3+ years and 40+ closings. Fewer mistakes, better strategy, stronger negotiation.Commission Clarity.
Typical structures cluster near ~2.5% in high-cost states and ~3% in lower-cost states, often paid by the seller, but negotiable. Demand transparency and negotiate where possible.
Do Rate Cuts Automatically Add ~7.5% to Home Prices?
Short answer: no fixed rule. Lower rates improve affordability and can lift demand, which often supports prices within 1–2 years, especially where supply is tight. But the effect varies by cycle, inflation backdrop, and local inventory.
Mortgage rates track 10-year Treasury yields and mortgage-backed security spreads more than the Fed’s overnight rate.
Fed moves shape expectations, but mortgage rates don’t always fall in lockstep with policy cuts.
Lender margins, credit risk, and inventory all influence the final rate you see.
Translation: don’t build your buy/sell strategy around Fed day headlines alone.
What I’m Watching Next
Whether Powell’s tone shifts rate expectations meaningfully.
PCE inflation’s direction of travel and any progress toward the Fed’s target.
Signs of buyer re-engagement if mortgage rates approach or dip below 6%.
Bay Area micro-trends: speed of sale, new listings, and the spread between list and close.
Takeaway: This week’s data may jiggle daily rate moves, but the broader story is slow-grind improvement in affordability from historically tight levels. If you’re considering a move, pair airtight financing with experienced representation and an eyes-wide-open view of local supply/demand.