Issue 128 - Hello and Happy Tuesday.

Powell’s comments at Jackson Hole were enough for the market to effectively price in a September 17th rate cut.

Mortgage rates already moved lower over the past week in anticipation, so don’t expect a huge drop when the Fed actually makes the move. The cut will matter for the broader economy, but mortgage rates tend to react ahead of time, meaning buyers already have the window of opportunity in front of them.

Personal Note:

TLDR (Too Long Didn’t Read) Summary

• ⬇️ RATES - Down slightly again!

• 📊 TECHNICALS - Fed signaling September CUT.

INTEREST RATES
Rates 📢 August 26th, 2025

Rate data as of morning of publication. Unless noted otherwise, all scenarios are assuming 30 Year-Fixed mortgage, Purchase or R/T Refinance. No origination points charged, 780 FICO score, and 20% down payment. Provided for consumer education only and does not serve as a binding offer to extend lending. Payment period, interest rate, APR, and other terms subject to income, asset, and credit profile qualification. Provided courtesy of GTG Financial, Inc. NMLS 1595076. Equal housing opportunity. www.nmlsconsumeraccess.org

💡 Why This Matters

📉 Powell Signals Cuts Ahead: Fed Chair Jerome Powell confirmed that job growth has slowed more than previously reported and that risks to employment are rising. This opens the door for a rate cut at the Fed’s September 17 meeting, with markets already pricing in odds as high as 90%. Remember, we are talking about the FED FUNDS RATE.

🛑 Inflation Still a Watch Point: Powell noted that tariff-driven inflation should be temporary and not derail policy changes. As long as inflation data doesn’t spike higher than expected, it likely won’t stop the Fed from cutting.

📊 Data Will Drive the Decision: The key event between now and the September Fed meeting will be the Jobs Report on September 5. If the numbers come in weak again, it almost guarantees a cut. If they’re surprisingly strong, it could raise doubts. Also, keep an eye on revisions coming September 9, which could reshape the labor market picture.

💡 Realtor Insight: A Fed cut would put downward pressure on mortgage rates, making financing more attractive for buyers. If jobs data shows cracks in the labor market, that could fast-track relief on rates—but if the numbers come in strong, volatility may spike short term.

TECHNICALS

Fed’s Powell Signals Rate Cut Ahead🏦 

🏦 Powell Gives Green Light for Rate Cut

At the Jackson Hole Symposium, Powell said the “shifting balance of risks” may warrant a Fed rate cut at the September 17 meeting.

📊 Quick refresher:

• The Fed Funds Rate = overnight rate banks charge each other.

• It sets the tone for borrowing costs but doesn’t directly dictate mortgage rates.

• Mortgage rates often react ahead of Fed moves based on expectations.

Realtor Insight: If the Fed cuts in September, buyers sitting on the fence may jump back in. Expect more rate-shopping activity as clients start asking if “now is the time.”

🏡 Existing Home Sales Rebound in July

After June’s slump, July sales popped 2% to 4.01M annualized units. Median sales price dipped to $422,400 (-2.4% from June).

• Inventory hit a 5-year high (1.55M), but only 1.1M were truly “active” listings.

• NAR’s Lawrence Yun: buyers are in the best position in 5+ years to negotiate.

Realtor Insight: More inventory = more opportunities. Sellers need to price smart, and buyers finally have some leverage to ask for concessions.

👷 Labor Market: Hiring Slows, Claims Climb

• Initial jobless claims up to 235K.

• Continuing claims at 1.97M, the highest since late 2021.

• Translation: people are taking longer to find new jobs.

Realtor Insight: A softer labor market could pressure the Fed to cut rates. But it also means some buyers may feel less confident about making a big move.

📅 What’s Next This Week

• Mon: New Home Sales

• Tue: Home Price Index

• Thu: Pending Sales, Jobless Claims, GDP revision

• Fri: PCE Inflation (Fed’s favorite gauge)