Hi Friends,
As we enter the heart of summer, buyers, sellers, and real estate professionals alike are watching the headlines a little more closely. Why? Because this week is packed with key economic reports that could influence mortgage rates and with them, affordability, purchasing power, and buyer behavior.
If you’re planning a move, these next few days could be more important than you think. Let’s break it down.
What to Watch This Week
Tuesday: Consumer Price Index (CPI) for June
This is the inflation report everyone waits for. If consumer prices show signs of cooling faster than expected, mortgage rates could ease. But if inflation is still sticky, the Federal Reserve might hold off on rate cuts, keeping borrowing costs higher, longer.
Wednesday: Producer Price Index (PPI)
This report tracks wholesale prices, or, what businesses pay before products hit shelves. A slowdown here can signal future relief in consumer prices. If that happens, it strengthens the argument for the Fed to ease up on rates.
Thursday: Retail Sales + Weekly Jobless Claims
Retail sales show how much consumers are spending. Lower-than-expected spending can be a sign that the economy is cooling, something the Fed looks for when deciding whether to adjust rates. Jobless claims are also key; a rise in unemployment could tip the Fed toward rate cuts sooner.
Friday: University of Michigan Consumer Sentiment Index
This survey offers insight into how optimistic (or nervous) consumers feel about the economy. Confidence tends to drive spending. A drop in sentiment could signal future slowdown, further supporting a softer rate environment.
All Week: 12 Federal Reserve Officials Speaking
No fewer than a dozen Fed policymakers will be making public remarks this week. With the Fed still split on when to begin easing rates, markets will be hanging on every word. Any comments hinting at rate cuts could move mortgage markets instantly.
A Quick Look Back: What Happened Last Week
The Fed Is Still Divided
Minutes from the Fed’s June meeting revealed a split. Some members support a rate cut as early as July. Others prefer to wait until late 2024, or not at all until 2026. Everyone’s waiting on data to make the next move.
Home Prices Are Still Climbing
According to Cotality, U.S. home values rose 0.3% from April to May and are up 1.8% year-over-year. Projections suggest another 4.2% increase over the next 12 months. With tight inventory, even small gains highlight the long-term value of owning a home.
The Labor Market Is Slowing—But Quietly
Job creation in June beat expectations, but the number of continuing unemployment claims rose to 1.965 million—suggesting people are taking longer to find work. That’s a subtle, but meaningful sign that the job market may be losing steam.
Inflation: What’s Taking So Long?
The Fed’s primary tool for fighting inflation is interest rates. When inflation is high, they raise rates to slow spending. When it starts to cool, they cut rates to stimulate the economy.
So why the delay in rate cuts?
Even though inflation has eased significantly from the 9% highs of 2022, it’s still not near the Fed’s 2% target. Cutting too soon could risk a rebound, especially with factors like new tariffs and rising energy costs threatening to push prices higher again.
Why This Week’s CPI Report Matters for Buyers
The Consumer Price Index is the Fed’s go-to measure for inflation. A softer-than-expected report this week could signal to the Fed that it’s safe to begin cutting rates. That’s the moment mortgage rates could finally begin to fall, giving buyers more breathing room.
But if inflation runs hotter than expected, the Fed will likely stay put and today’s borrowing costs may stick around a while longer.
The Wealth Gap and the Power of Ownership
Inflation doesn’t affect everyone the same way.
Wealthier households typically benefit from rising prices because they own appreciating assets like real estate, stocks, and businesses.
Lower-income households, on the other hand, tend to feel inflation more directly through higher costs on essentials like rent, gas, and groceries.
That’s why homeownership remains one of the best long-term strategies for building wealth and protecting yourself from rising costs. It’s not just a place to live, it’s an investment that pays dividends over time.
Who’s Buying Homes in 2025? Family Help Plays a Big Role
According to Redfin, nearly 24% of Gen Z and millennial homebuyers used a family gift or inheritance to help with their down payment. That’s nearly 1 in 4 buyers getting a financial boost from family.
Other strategies:
18% lived with family to save.
20% sold stocks.
13% dipped into retirement funds.
13% used crypto gains.
Despite these creative approaches, over half of young buyers still saved directly from their paychecks. With the typical down payment now around $63,000, buyers are doing what they can to stay in the game.
Is 2025 Still a Smart Time to Buy? Absolutely! and Here’s Why:
Inventory is still tight. With fewer new listings, prices remain resilient even in a slower market.
Rates will eventually fall. When they do, pent-up demand will likely push prices higher. Buy before the crowd comes back.
You can refinance later. But you can’t go back and buy at today’s price once values rise.
Equity builds wealth. Real estate remains one of the most consistent ways to grow your net worth.
Political pressure is mounting for lower rates. No matter who’s in office, expect more attention on affordability in 2025 and beyond.
Final Thoughts
This is not a market for fence-sitting. Yes, rates are higher. Yes, affordability is stretched. But that also means buyers have more negotiating power right now. The smartest move? Get clear on your numbers, take advantage of available financing tools, and be ready to act when the right home pops up.
Looking for guidance on building a strategy that works for you? Let’s talk.