Welcome back to Mortgage Porter Weekly! This week, we’re covering the Federal Reserve’s decision to keep rates steady, what to expect from Friday’s jobs report, and a major shift in condo financing that takes effect today. Watch the video above, then read on for the details.
The Federal Reserve maintained the Fed Funds Rate at 3.50% to 3.75% last week, a decision that was largely anticipated. While this rate doesn’t directly set mortgage rates, it influences borrowing costs across the economy. The vote wasn’t unanimous, with three officials advocating for a quarter-point increase due to concerns about inflation risks linked to the conflict in Iran and ongoing negotiations.
The Fed remains focused on balancing inflation reduction with maintaining a stable labor market. Inflation continued to ease, with the Personal Consumption Expenditures index dropping to 3.7% annually in June, while core PCE, which excludes food and energy, reached 3.3%.
Housing data showed continued strength, with the Case-Shiller index reflecting a 0.6% rise in home prices from April to May, and the FHFA Home Price Index showing a 0.8% increase in May. Both indicators highlight ongoing momentum in home values this spring.
Second-quarter GDP growth came in at an annualized 1.5%, slightly below expectations, as consumer spending, exports, and business investment offset slower government spending and higher imports.
The Optimal Blue Index reported the average 30-year fixed mortgage rate at 6.7% as of July 31, a slight increase from the previous week. This index reflects about 35% of mortgage transactions and serves as a trend indicator rather than a rate quote. Your specific rate will depend on factors like your credit score and loan-to-value ratio. I can provide a personalized rate quote for a home in Washington state if you’d like.
This week marks the start of Jobs Week, with markets expecting the ADP report to show around 70,000 jobs added in July and the BLS report to show about 83,000. The unemployment rate is expected to rise slightly to 4.3%. While these numbers are not strong, lower-than-expected results could help mortgage rates improve.
Key economic events this week include the PMI Manufacturing report on Monday, JOLTS on Tuesday, ADP Employment and ISM Services Index on Wednesday, Jobless Claims on Thursday, and the BLS Jobs Report on Friday. The next FOMC meeting is scheduled for September 15th and 16th.
Condo buyers and owners should note significant changes in financing. As of August 3rd, the “Limited Review” process for conventional condo loans has been replaced. Established projects now require either a Full Review or a Waiver of Project Review. Full Reviews involve more documentation from the association, which may lead to longer timelines and more paperwork for buyers.
However, there’s a positive development: the Waiver of Project Review now applies to projects with 10 or fewer units, up from 4 units previously. This could simplify financing for smaller buildings. If you own a condo, ensure your HOA is aware of these changes, as they may impact resale value. For more details, check out this post on condo financing changes.
If you have questions about your specific situation—whether buying, refinancing, or exploring retirement mortgage options—I’d be happy to discuss it with you.
Reach out with any questions!
