The Mortgage Economic Review is a Monthly Summary of Key Economic Indicators, Data, and Events pertinent to Mortgage, Housing, and Finance Professionals.

AT A GLANCE – Key Economic Events and Data released during July 2025

• Interest Rates: The 10-year Treasury yield rose to 4.37% (Jul 31) from 4.24% (Jun 30).
• Housing: Existing Home Sales fell 2.7% (0.0% YoY), New Home Sales rose 0.6% (-6.6% YoY), and Home Prices are up 2.8% YoY.
• Labor: The US Economy created 73,000 New Jobs during July and 14,000 in June. The Unemployment Rate rose to 4.2% in July. Wages are growing at 3.9% YoY.
• Inflation: CPI rose 0.3% in June (+2.7% YoY), and PCE rose 0.3% (+2.6% YoY).
• The Economy: US GDP grew at a 3.0% annualized rate in 2Q2025 (+ 2.0% YoY).
• Consumers: Retail Sales rose 0.6% in June (+3.9% YoY), and Consumer Confidence rose 2.1% in July (-4.6% YoY).
• Stock Markets rose in July: Dow +3.7%, S&P +2.2%, Nasdaq unchanged.
• Oil Prices rose to $68/Barrel (Jul 31) from $65/Barrel (June 30).

Interest Rates and Fed Watch

The latest FOMC Meeting wrapped up on July 30, and, as expected, the Fed left Interest Rates unchanged. The Fed Funds Rate remains at 4.25% – 4.50% where it has been for the last 7 months. The reasoning was the same as it has been for the last 5 FOMC Meetings. The Fed Statement said the Labor Market is “solid” with a low Unemployment Rate and Inflation that is “somewhat elevated”. At the press conference after the FOMC meeting, Fed Chair Powell said: “Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and Inflation remain to be seen…Our obligation is to keep longer term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem.” The next FOMC Meeting is September 16th and 17th, and the vast majority of market analysts expect a 0.25% cut in Interest Rates.

Housing Market Data Released during July 2025

The Housing Market had a difficult first half of 2025. Existing Home Sales fell 2.7% in June while New Home Sales eked out a 0.6% gain. There was another month of a slight decline of 0.2% – 0.3% in Home Prices (+2.0% – 2.8% YoY). The Inventory of Homes for Sale is up 16% YoY. There are 2,041,000 New and Existing Homes for sale (1,530,000 Existing + 511,000 New). That’s about 10% below the 2019 Pre-Pandemic level of 2,253,000 (1,920,000 Existing + 333,000 New). 

• Existing Home Sales (closed deals in June) fell 2.7% to an annual rate of 3,930,000 homes (3,570,000 SFR + 360,000 Condos), unchanged in the last 12 months. The median Single Family Home price is $441,500, up 2.0% YoY. The Median Condo price is $374,500, up 0.8% YoY. Homes were on the market for an average of 27 days. Currently, 1,530,000 homes are for sale, up 15.9% YoY.
• New Home Sales (signed contracts in June) rose 0.6% to a seasonally adjusted annual rate of 627,000 Homes, down 6.6% YoY. (683,000 New Homes were sold in 2024 and 668,000 in 2023). The median New Home price fell 4.9% to $401,800, down 2.9% YoY. (Peak $496,800 Oct 2022). The average price fell 2.1% to $501,000, up 11.1% YoY.  (Peak $568,700 Dec 2022). There are approximately 511,000 New Homes for sale, up 8.5% YoY (Low of 281,000 Oct 2020).
• Pending Home Sales Index (signed contracts in June) fell 0.8% to 72.0 from 72.6, down 2.8% YoY.
• Building Permits (issued in June) rose 0.2% to a seasonally adjusted annual rate of 1,394,000 units, down 4.4% YoY. Single-Family Permits fell 3.7% to an annual pace of 866,000 homes, down 8.4% YoY.
• Housing Starts (excavation began in June) rose 4.6% to a seasonally adjusted annual rate of 1,321,000, down 0.5% YoY. Single-Family Starts fell 4.6% to 883,000 units, down 10.3% YoY.
• Housing Completions (completed in June) fell 14.7% to a seasonally adjusted annual rate of 1,314,000 units, down 24.1% YoY. Single-Family Completions fell 12.5% to an annual adjusted rate of 908,000 homes, down 15.5% YoY.
• S&P/Case-Shiller 20 City Home Price Index fell 0.3% in May, up 2.8% YoY.
• FHFA Home Price Index fell 0.2% in May, up 2.8% YoY.
• NAHB Index rose 3.1% to 33 in July from 32 the prior month, down 19.5% YoY.

Labor Market Economic Data Released during July 2025

The number of New Jobs created by the Economy dropped in the last few months. The Economy created 73,000 New Jobs in July and a revised 14,000 in June. There were two major downward revisions to New Jobs in May and June: May was revised down from 144,000 to 19,000, and June was revised down from 147,000 to 14,000. Those two downward revisions subtracted 258,000 jobs. The Unemployment Rate is 4.2% and Wage growth is 3.9%. The Labor Market is still very robust, but tiny cracks are beginning to form. Keep in mind, a softer Labor Market is the goal of the Fed, because it is unlikely they can tame Inflation with a hot Labor Market.

• The Economy created 73,000 New Jobs in July and 14,000 in June.
• The Unemployment Rate rose to 4.2% during July from 4.1% in June and 4.2% in May and April.
• The Labor Force Participation Rate fell to 62.2% in July from 62.3% in June 62.2% and May.
• The Average Hourly Wage rose 0.3% in July from 0.2% during June, up 3.9% YoY.
• Job Openings fell to 7,437,000 in June from 7,712,000 in May and 7,391,000 in April. (In 2024 average Job Openings was 7,800,000).

Inflation Economic Data Released during July 2025

The last few months of Data show that Inflation is re-accelerating. It’s easy to blame the re-acceleration on Tariffs since they have dominated most Economic discussions over the last few months. However, a deeper dive into the data shows a cloudy picture. Food, Shelter, and Energy continue to be the main culprits of Inflation. Tariffs have not had enough time to affect those (and other) components significantly. Energy Prices (especially Wholesale Gasoline) rose in July, which is going to raise Inflation. If Inflation is worse next month, expect Tariffs to get the blame, regardless of the real cause. Most Economists expect that Tariff driven Inflation (when it does hit) will be temporary – but no one (including the Fed) knows for sure.

• CPI rose 0.3%, up 2.7% YoY               |      Core CPI rose 0.2%, up 2.9% YoY
• PPI moved 0.0%, up 2.3% YoY          |      Core PPI moved 0.0%, up 2.5% YoY
• PCE rose 0.3%, up 2.6% YoY              |      Core PCE rose 0.3%, up 2.8% YoY

GDP Economic Data Released during July 2025

The first estimate of 2nd quarter 2025 GDP showed the US Economy grew by a 3.0% annualized rate, (+2.0% YoY). That is an impressive rebound from the 0.5% 1st quarter contraction. The wild swings in GDP were exacerbated by the recent Tariff negotiations between the US and its trading partners, particularly how imports and exports affect the GDP calculation. Now that we are in the 2nd half of 2025, we are beginning to get a better picture of how the Tariffs affect the overall Economy. As always, don’t put too much credence in a single data point, but watch the trend over months.

Consumer Economic Data Released during July 2025

Consumer Confidence and Retail Sales were both positive last month. Retail Sales increased 0.6% in June after a 0.9% plunge in May – that’s a big swing. Consumer Confidence also turned positive in June after being negative in May as fear of Tariffs eased. Recent Tariff Agreements with several large US trade partners have alleviated some of that concern. In the meantime, the solid Labor Market means Consumers are secure in their jobs. As long as they are secure in their jobs, Consumers will continue to spend.

• Retail Sales rose 0.6% during June, up 3.9% in the last 12 months.
• Consumer Confidence Index rose 2.1% to 97.2 in June from a revised 95.2 in May, down 4.6% YoY.
• Personal Income rose 0.3% in June, up 4.7% YoY.
• Personal Spending rose 0.3% in June, up 4.7% YoY.
• Personal Savings Rate was unchanged at 4.5% in June from 4.5% in May and 4.9% in April.

Energy, International, and Things You May Have Missed

• West Texas Intermediate Crude rose to $68/Barrel (Jul 31) from $65/Barrel (Jun 30).
• North Sea Brent Crude rose to $73/Barrel (Jul 31) from $68/Barrel (Jun 30).
• Gasoline (Wholesale Futures) rose to $2.22/Gal (Jul 31) from $2.09/Gal (Jun 30).
• Natural Gas rose to $3.10/MMBtu (Jul 31) from  $3.46/MMBtu (Jun 30).
• The US and European Union reached an Agreement on Tariffs.
• The Tax Cuts and Jobs Act was signed into law with significant changes to Income Taxes.

The Mortgage Economic Review is a concise summary of Key Economic Data that influences the Mortgage and Housing Markets. It’s a quick read that keeps busy Professionals updated on important Economic Information. Feel free to share this with colleagues in the Mortgage, Housing, Finance, and Banking business. To have the Mortgage Economic Review emailed to you each month, click here.

Discover New Lending Opportunities at MortgageElements.com, where you can explore over 300 TPO Wholesale and Correspondent Mortgage Lenders from one website, including:

• Non-QM, Non-Prime, & Hard Money
• Agency: Conventional, FHA, VA, & USDA
• 2nd & Equity Lines
• Reverse
• Commercial
• Warehouse
• Construction, Rehab, 203K, Fix n Flip

Use the Mortgage Periodic Table to research Mortgage Products and connect with TPO Account Executives. It costs nothing to use. It is one of the industry’s largest databases of TPO Mortgage Lenders.

Mark Paoletti, MortgageElements.com

This Economic Review is for informational and educational purposes only and should not be construed as investment, legal, financial, or mortgage advice. The information is gathered from sources believed to be credible and may be opinion-based and editorial in nature. Mortgage Elements Inc does not guarantee or warrant its accuracy or completeness, and there is no guarantee it is without errors. This newsletter is primarily intended for use Housing and Finance Professionals but it can be useful for anyone interested in Economics. This newsletter is not an advertisement to extend credit or solicit mortgage originations. © Copyright 2025 Mark Paoletti, Mortgage Elements Inc, All Rights Reserved.