Weekly Mortgage Market Update – Fed Rate Cut Expectations Keep Mortgage Rates Near Yearly Lows
Raleigh Mortgage Snapshot: Rates flirted with new 2025 lows midweek after friendlier inflation data, then ticked up Friday as hotter wholesale prices and firm retail spending nudged yields higher. For Raleigh-area buyers, that midweek dip offered a glimpse of what’s possible if inflation continues to cool—an affordability boost in a market where home prices remain steady and competition is fierce. Even with Friday’s bump, the average 30-year fixed in Raleigh is still sitting in the high-6% range, which is notably better than the 7%+ levels that dominated much of the past year.
For refinancers across Wake County and the broader Triangle, this stability is meaningful. Homeowners considering a VA IRRRL, FHA Streamline, or a Conventional rate-and-term refinance may find that locking in while rates are still near recent lows could pay off before the next round of economic data shifts the market again. In short, Raleigh borrowers remain in a window of opportunity—but it may not stay open for long.
What moved rates this week
Understanding the Impact of the Fed Rate Cut
CPI: Still trending cooler (good for bonds)
July’s Consumer Price Index landed right where economists expected: headline CPI rose 0.3% m/m and 2.7% y/y, while core CPI (ex-food & energy) increased 0.2% m/m and 2.9% y/y. Markets read this as “no inflation re-acceleration,” which helped push mortgage-backed securities and Treasuries higher on Wednesday—putting mortgage rates at their best levels since October 2024.
PPI: A hotter wholesale print (headwind)
Thursday’s Producer Price Index told a different story: headline PPI +0.9% m/m and +3.3% y/y—both above forecasts—rekindled concern that upstream price pressure could bleed into consumer inflation in the coming months. Bonds gave back some gains, and lenders nudged rate sheets a touch higher.
Retail sales: Consumers still spending
Friday’s July retail sales rose 0.5% m/m, signaling resilient demand. Stronger spending can keep inflation sticky, so the bond market weakened into the close, and a few lenders issued small afternoon reprices. Even so, rates remain much closer to their recent lows than their 2025 highs.
Where mortgage rates landed
Average top-tier 30-year fixed hovered in the 6.6%–6.8% band by week’s end. National trackers showed fresh 10-month lows midweek, followed by a modest bounce. If you’re shopping in Wake, Durham, Orange, or any other Triangle Area County, this week still counts as a win versus early summer levels.
Why this matters for Raleigh Homebuyers & Homeowners: Lower rates increase purchasing power and may open refinance options (rate/term, FHA Streamline, VA IRRRL) that didn’t pencil just a month or two ago. If you’re targeting a fall move, locking on dips or setting a rate-watch strategy can save real dollars in our still-competitive Triangle market.
The bigger picture
This week illustrated a familiar tug-of-war: consumer inflation is easing, but upstream costs and steady spending can slow the last mile back to 2%. For mortgage shoppers, that means the path lower for rates likely comes in steps—not a straight line—and data surprises (good or bad) can quickly shift daily quotes.
Strategy for Raleigh, Cary, and Apex
Buyers: Pre-approve with a lender that can float-down if rates improve after you lock. In multiple-offer neighborhoods, pairing a competitive lock with a TBD underwrite can strengthen your offer timeline.
Refinancers: If your existing note starts with a 7 or 8, run the numbers. Even a 0.375%–0.5% improvement can lower monthly payments or shave years off with a move to a 20- or 15-year term. Ask about FHA Streamline and VA IRRRL if you qualify—reduced documentation and no appraisal can speed things up.
Investors/second homes: Watch fees and LLPAs; today’s pricing is friendlier than earlier this year, but volatility around data days argues for quick decision-making.
What’s next (and why it could move your rate)
Fed Minutes (last meeting): A deeper read on policymakers’ inflation tolerance and growth concerns could sway rate-cut timing expectations.
Housing data: Homebuilder sentiment, housing starts, and existing-home sales will color the supply/demand story that’s central to Triangle affordability.
PCE inflation (next release window): The Fed’s preferred gauge. If it echoes CPI’s cooler tone, we could revisit the week’s lows; if it leans more like PPI, lenders could price defensively ahead of the print.
Reality check: Mortgage rates don’t wait for the Fed to actually cut. They react first to expectations. That’s why we saw new 2025 lows immediately after CPI, not at any policy meeting. Plan accordingly—set alerts and be ready to lock on favorable moves.
Quick reference: This week’s key data
CPI (July): Headline +0.3% m/m, +2.7% y/y; Core +0.2% m/m, +2.9% y/y (rate-friendly).
PPI (July): Headline +0.9% m/m, +3.3% y/y (rate headwind).
Retail Sales (July): +0.5% m/m (keeps demand firm).
Rate context: MND flagged 10-month lows midweek; averages still in the high-6s today.
Ready to run the numbers?
If you’re buying in Raleigh, Cary, Apex, or Wake Forest—or considering a VA IRRRL, FHA Streamline, or rate/term refi anywhere in North Carolina—Certified Home Loans can build a lock strategy around the next data wave and help you capitalize on dips while protecting against bounces.
