Weekly Mortgage Market Update – Rates Near 8-Month Lows as Fed Signals Patience

As the Fed signals its intentions, it is crucial for homeowners to stay updated on the latest rate trends.

This week saw mortgage rates dip to their lowest point since early November 2024, with the average 30-year fixed mortgage hovering around 6.75%, down from about 6.86% last week, according to Bankrate.com. These improvements were welcomed across the purchase and refinance markets as refinancing rates edged just below 7%. For homeowners and buyers in Raleigh, this drop means better affordability, though rates remain elevated compared to pandemic-era lows.

The recent dip in mortgage rates reflects the impact of FED Signals that indicate a more favorable economic outlook.

🏦 What Moved Mortgage Markets This Week?

🔍 Understanding FED Signals in Rate Decisions

Understanding FED Signals can provide valuable insights into future market movements and mortgage rates.

1. Fed Holds Firm, Talks Shift Toward Cuts
   Although the Fed affirmed its hold on the current funds rate (4.25–4.50%) during the June 18 meeting, policymakers emphasized that future rate cuts are being considered based on evolving data. This “pause but prepare” stance—coupled with dovish remarks, particularly from Vice Chairs suggesting potential July cuts—encouraged bond market gains and supported mortgage rate declines.

   Market reactions can often be traced back to the FED Signals that shape economic expectations.

2. Inflation Nudges Higher, But Still Tamed
   May’s PCE inflation—the Fed’s preferred gauge—showed a 0.1% monthly rise with core inflation up 0.2% year-over-year to 2.7%. While this suggests inflation remains sticky, the steady tone helps balance rate-cut expectations. Markets are now pricing in first rate cuts as early as September.

   The influence of FED Signals on inflation is a critical factor for mortgage rate forecasts.

3. U.S. Consumer Confidence Declines
   Confidence fell to 93.0 in June from 98.4, per the Conference Board. Concerns about jobs and tariffs dominated sentiment, even as long-term inflation expectations eased. That mixed consumer outlook kept bond yields steady and mortgage rates within a tight range.

   Consumer confidence can fluctuate based on FED Signals, impacting overall market stability.

4. Stocks & Bonds React to Global Headlines
   A renewed U.S.–China trade deal and progress in the Israel–Iran ceasefire pushed markets higher this week, supporting bond demand. As equities rallied, mortgage spreads improved, giving borrowers breathing room on rates despite yield fluctuations.

   Investors often analyze FED Signals to gauge potential shifts in economic policy and its effects on mortgage rates.

📊 Raleigh Mortgage Outlook

For Raleigh homebuyers and homeowners:

• 40–Year Perspective: Though rates are above the historic lows of ~6%, the current 6.75% presents a relative win compared to May highs of ~7.15% and well below February 2023 peaks near 8%.

• Opportunity Window: With inflation cooling, the Fed hinting at rate cuts, and bond markets optimistic, now may be an ideal time to lock in rates before volatility returns.

• Stay Informed: Upcoming U.S. data—including durable goods, consumer confidence, and PCE updates—will help shape expectations for a potential rate shift in Q3 2025.

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🔜 What to Watch in the Week Ahead

Next week’s events will likely be influenced by recent FED Signals that could affect market behavior.

Next week’s economic calendar holds several critical updates that could shape the direction of mortgage rates heading into July:

• 📆 Friday – PCE Inflation Report
  The Personal Consumption Expenditures (PCE) Price Index is the Federal Reserve’s preferred inflation gauge. Markets will be paying close attention to whether Core PCE continues its slow descent toward the Fed’s 2% target. A softer-than-expected reading could strengthen the case for an earlier rate cut, potentially as soon as September. However, a surprise uptick could cause bond yields to reverse course and apply upward pressure on mortgage rates.

  Market analysts will scrutinize the PCE Inflation Report for any hints from FED Signals that could shape rate cut expectations.

• 📆 Monday – Durable Goods Orders
  Durable goods data measures business investment and overall economic momentum. A sharp drop could indicate a slowing economy, fueling speculation that the Fed will need to step in with rate cuts to avoid recession. On the other hand, stronger-than-expected orders could push yields higher, potentially stalling the recent downward trend in mortgage rates.

  Durable goods data could reflect broader trends that are also influenced by FED Signals.

• 📆 Tuesday – Consumer Confidence (Follow-Up)
  The Conference Board’s revised consumer sentiment data will provide more clarity on how Americans are feeling about inflation, jobs, and future spending. A sharp decline in confidence could signal weaker demand and increased pressure on the Fed to adjust its policy stance.

• 🗣️ Throughout the Week – Fed Speakers in Focus
  Several members of the Federal Reserve are scheduled to speak next week, including Chair Jerome Powell. After last week’s congressional testimony struck a more dovish tone, markets will be listening closely for any further signals about when rate cuts might begin and how quickly they could unfold. Even subtle shifts in language or tone can sway bond markets and influence mortgage rate direction in the short term.

  Statements from FED officials will provide insights into upcoming FED Signals that affect market sentiment.

At Certified Home Loans in Raleigh, we’re keeping a close watch on these changing dynamics to help our Triangle-area clients find the right moment to act—whether you’re buying, refinancing, or exploring mortgage options.

Contact us for a personalized rate quote and strategy tailored to your goals.