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- 💸 Summer Surge Is Here
💸 Summer Surge Is Here
Mortgage Rates Move Lower ⬇️, Inflation Numbers Surprise, Applications Jump.
Issue 122 - Hello and Happy Tuesday.
Last week, we talked about how the Fed isn’t lowering rates yet because inflation is still too high. The latest PCE report showed prices up 2.7%, a bit hotter than expected.
But despite that, mortgage rates have dropped for four weeks in a row. Why?
✅ Weaker economic data is making investors think cuts will come eventually.
✅ Tensions in the Middle East are driving money into safer bonds, which helps rates fall.
✅ Summer demand is picking up as buyers rush to lock in lower rates.
Bottom line: “High” inflation could slow this rate drop, but so far it hasn’t stopped it. Activity is picking up fast, summer is here, and buyers are back.
TLDR (Too Long Didn’t Read) Summary
⬇️ RATES - Movement DOWN
📊 TECHNICALS - Inflation Report Surprises
INTEREST RATES
Rates 📢 July 1st, 2025

10 year 3 - Month Snapshot
Product | Rate / APR | Weekly Change |
---|---|---|
⬇️ Conv. | 6.625% / 6.527% | -.125% |
⬇️ Conv. HB | 6.875% / 6.888% | -.125% |
⬇️ JUMBO | 6.375% / 6.386% | -.125% |
⬇️ FHA 3.5% DP | 5.999% / 6.925% | -.125% |
⬇️ VA 0% DP | 6.000% / 6.219% | -.125% |
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
📉 Rates Moved Down Slightly
Mortgage rates dipped by 0.125% across the board, giving buyers a small but welcome improvement. Conventional loans are now closer to 6.625%, and government-backed options like FHA and VA are hovering just above 6%.
📊 Bond Yields Still in a Down Channel
The 10-year Treasury yield continues to drift lower, as shown in this week’s technical chart. This decline is helping mortgage rates soften, but resistance levels in the bond market are keeping a lid on bigger moves down.
📰 Market Drivers to Watch
Jobs Data This Week: ADP and BLS jobs reports are due, with expectations ranging from 85,000 to 110,000 new jobs. Weak job creation could put additional pressure on rates to improve.
Geopolitical Risks: Middle East tensions remain, which could drive more money into bonds and help rates hold or improve temporarily.
New Treasury Supply: The government’s rising deficit means more Treasuries are coming to market. Over time, this could limit how far rates can fall if demand doesn’t keep up.
💡 Realtor Insight:
A modest rate dip is giving some buyers a reason to re-engage, but it’s still a tight window. Use this opportunity to encourage pre-approved clients to lock in before fresh economic data or Treasury supply reverses the trend.
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TECHNICALS
Inflation Surprises
Prices rose more than expected last month. Core inflation is stuck at 2.7%, making it harder for the Fed to lower rates soon. This likely means mortgage rates will stay higher for now.
📈 Inflation Update: A Little Hotter Than Expected
What Happened:
The Fed’s favorite inflation measure, Core PCE, rose by 0.2% in May—slightly above the 0.1% forecast. Annual Core PCE now sits at 2.7%, just over the Fed’s 2% target.
Why It Matters:
Shelter costs remain stubbornly high, making it harder for inflation to cool quickly. Since past months’ inflation readings were already low, expect progress toward the 2% target to stay slow through the rest of 2025.
Realtor Insight:
🏷️ Takeaway: Elevated inflation makes it less likely the Fed will cut rates soon. Buyers should expect mortgage rates to stay higher into early 2026 unless economic data weakens sharply.

🔭 What’s Next?
Key Reports This Week:
🗓️ Tuesday: Job Openings (JOLTS)
🗓️ Wednesday: ADP Payrolls
🗓️ Thursday: Weekly Jobless Claims + Big June Employment Report
Markets will be closed on Friday for Independence Day.
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