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Mortgage rates, after moving lower early in the week, have moved back up and are now right where we started on the heels of two key inflation reports. The 30-year fixed mortgage rate at the time of this post is 5.75%, 5.981% APR with 2.330 points; or 6.375%, 6.388% APR with 0 points for top-tier borrowers putting 25% down with 780+ credit. The 15-year fixed mortgage rate for the same category of borrowers is 4.875%, 5.249% APR with 2.293points; or 5.625%, 5.672% APR with 0 points.
On Tuesday, the July CPI report showed overall inflation rising 0.2% for the month and year-over-year inflation flat at 2.7%, which aligned with expectations. Energy prices declined, helping overall inflation remain stable for the month. The Core inflation rate, removing food and energy prices, increased by 0.3%, slightly higher than expected. Annually, the core rate rose from 2.9% to 3.1%, hotter than expected. Rates moved slightly higher on the news, as this is the second consecutive CPI report showing increasing inflation. While these inflation numbers aren’t hot, they are above the Fed’s 2% target, and components within the report show potential signs that tariffs are having a negative impact on prices. However, the move higher in rates was minimal, as fears that the tariffs will cause another round of out-of-control inflation like we saw post-pandemic are easing.
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The July PPI report showed wholesale inflation surprised the markets, coming in much hotter than expected. Both the headline and core rose 0.9% for the month, reflecting the first definitive signs that tariffs are making their way into the inflation data. The report released this morning has pushed rates up; however, thus far, the impact has been less than expected as the markets put more weight into softening employment. While PPI doesn’t impact rates as much as CPI and the Fed’s favorite measure of inflation, PCE, components of this report feed into PCE, which will be released later this month and could have a bigger impact on rates.
Following the Bureau of Labor Statistics (BLS) Jobs Report earlier this month, rates shot lower by .25%. The report showed only 73,000 jobs created in July, which was weaker than expected. The actual number was 1.07 million job losses before seasonal adjustments. The big market-moving news was the revisions for May and June, which were adjusted lower by 258k. This dropped May’s number to only 19k jobs added and June’s to only 14k. This continues the trend over the past couple of years of initial job reports from the BLS coming in stronger than expected, only to have revisions in subsequent months lower those job numbers dramatically. Unfortunately, this has repeatedly resulted in higher rates, as we have seen rates jump multiple times on strong job reports. Whether or not the rate drop is the beginning of a long-term trend depends on future data, the Fed, and inflation.
Since the jobs report, multiple Fed Governors have endorsed the Fed cutting rates in September. We can only assume that the Fed would have cut rates in July had it had more accurate jobs data showing a much weaker May and June than initial estimates. Chairman Powell has repeatedly pointed to a resilient job market as a reason for the Fed to hold higher rates for longer; however, it’s looking increasingly like they’re once again behind the curve and will have to play catch-up this fall.
Prior to the BLS jobs report, two lesser-followed reports, JOLTS and ADP, gave us insight into employment. JOLTS, which measures job openings and indicates hiring demand, dropped 275k for the month to 7.437M openings, well below estimates. The hiring rate also fell to the second-lowest level since 2013, when COVID-19 impacted reports were removed. ADP, on the other hand, came in better than expected, showing 104k job gains in the private sector. The markets did not react to the ADP report, as there has been virtually no correlation between the ADP and BLS jobs data.
The Fed’s favorite measure of inflation, PCE, showed inflation rising 0.3% in June while year-over-year inflation rose 2.6%, slightly above expectations. Core inflation also rose 0.3%, with year-over-year core inflation rising 2.8%. While not a hot inflation report, we are seeing signs of rising prices due to tariffs. Whether the higher prices remain manageable and transient remains to be seen. Rates didn’t move much on the data as inflation has taken a back seat in recent months to employment.
Before the July jobs report, the Fed left rates unchanged at its July meeting; however, for the first time since 1993, two Fed Governors, Waller and Bowman, dissented in favor of a 0.25% cut. Following the hotter-than-expected PPI report, the CME Group’s FedWatch Tool showed the probability of a September rate cut remaining all but certain, with over a 90% chance of the Fed cutting; however, the odds of a .50% cut have dropped and are now below 10%. Powell continued to focus on the potential impact of tariffs and the unemployment rate while acknowledging that the Fed was restrictive and that there are increasing risks in the labor market. He also admits that he expects inflation from tariffs to be a one-time price increase, yet doesn’t feel that now is the time to remove the Fed’s restrictive policy. It’s clear that the Fed would rather move too late, cutting rates, than too early.
As we exit the typical summer buying season, demand among home buyers is picking up, likely due to lower rates compared to early summer and spring. Fully underwritten pre-approvals are crucial for securing offers in this highly competitive market, particularly as interest rates dip.
To get the best possible rate, it is recommended that you compare lenders and work with a firm that provides transparent mortgage rates and associated costs online. At Sammamish Mortgage, knowledgeable and experienced Mortgage Advisors and Loan Officers are available to assist you in navigating the current market landscape and determining the best path ahead.
**Conforming assumptions – $800k Purchase Price, 25% Down, 800+ Credit
**Jumbo assumptions – $1.5MM Purchase Price, 25% Down, 800+ Credit
| Loan Programs | Rate | APR |
| Conforming 30 year fixed | 5.750% | 5.996% |
| Conforming 15 year fixed | 4.875% | 5.253% |
| Conforming 7/1 ARM | 5.250% | 6.393% |
| Jumbo 30 year fixed | 5.875% | 6.099% |
| Loan Programs | Rate | APR |
| Conforming 30 year fixed | 5.750% | 5.992% |
| Conforming 15 year fixed | 4.875% | 5.256% |
| Conforming 7/1 ARM | 5.250% | 6.386% |
| Jumbo 30 year fixed | 5.875% | 6.099% |
| Loan Programs | Rate | APR |
| Conforming 30 year fixed | 5.875% | 6.067% |
| Conforming 15 year fixed | 4.875% | 5.263% |
| Conforming 7/1 ARM | 5.250% | 6.393% |
| Jumbo 30 year fixed | 5.875% | 6.099% |
| Loan Programs | Rate | APR |
| Conforming 30 year fixed | 5.875% | 6.067% |
| Conforming 15 year fixed | 4.875% | 5.261% |
| Conforming 7/1 ARM | 5.250% | 6.396% |
| Jumbo 30 year fixed | 5.875% | 6.099% |
| Loan Programs | Rate | APR |
| Conforming 30 year fixed | 5.875% | 6.073% |
| Conforming 15 year fixed | 4.875% | 5.253% |
| Conforming 7/1 ARM | 5.250% | 6.396% |
| Jumbo 30 year fixed | 5.875% | 6.097% |
| Loan Programs | Rate |
| 30-year fixed mortgage rate | 5.79% |
| 20-year fixed mortgage rate | 5.62% |
| 15-year fixed mortgage rate | 5.10% |
| 10-year fixed mortgage rate | 5.12% |
| 30-year jumbo mortgage rate | 6.20% |
| 5/1 adjustable mortgage rate | 5.92% |
(State-specific rates sourced from Sammamish Mortgage – National Average rates sourced from Zillow)
Without a doubt, the biggest driver of interest rates is inflation. With that in mind, we continue to focus on inflation data and expectations going forward to gauge what we can expect to see interest rates in the coming months. Current inflation is cooling and moving closer to the Fed’s target of 2%. While current inflation numbers would typically warrant a lower Fed Funds Rate, the Fed has indicated that it wants to see the impact of tariffs before moving on to additional rate cuts.
Consumer Price Index (CPI) June= 0.3% – Annual = 2.7%
Producer Price Index (PPI) June = 0.0% – Annual = 2.3%
Personal Consumption Expenditures (PCE) June = 0.3% – Annual = 2.6%
Overall, it is difficult to predict what will happen with mortgage rates in the near term. With global economic turmoil, banking issues, inflation, and thus far a far more resilient economy than many expected, trying to predict rates from one day to the next to time a rate lock is almost impossible or at least requires luck. However, looking at a longer time horizon, it’s much easier to see that there is an excellent chance we could see rates move lower from current levels, providing an opportunity for recent and existing buyers to potentially refinance in the future.
When the Federal Reserve raises interest rates, it affects various aspects of the economy, including the housing market, savings, and investment.
For potential homebuyers, a Fed rate hike typically leads to an increase in mortgage rates in the early stages of a tightening cycle; however, if the market thinks the Fed rate increases will hurt the economy and cause inflation to decrease, mortgage rates can improve when the Fed raises the Fed Funds Rate. It’s important to note that the Fed does not control mortgage rates. Fed rate increases do directly impact credit card rates, car loans, and commercial loans, which are shorter in duration than a typical 30-year fixed mortgage.
For savers, a Fed rate hike may lead to higher returns on savings accounts and certificates of deposit (CDs). In addition, banks and other financial institutions may increase the interest rates they pay to savers to remain competitive, which can benefit savers looking to earn more on their savings.
A Fed rate hike may impact the stock and bond markets for investors. Typically, when interest rates rise, the value of stocks and bonds can fall as investors may shift their money to fixed-income investments with higher returns. However, the impact of a rate hike on the markets can be complex and depends on various factors, such as the overall state of the economy, inflation expectations, and global events.
| FOMC Meeting Date | Rate Change (bps) | Federal Funds Rate |
| January 29, 2025 | -25 | 4.00% to 4.25% |
| December 18, 2024 | -25 | 4.25% to 4.50% |
| November 7, 2024 | -25 | 4.50% to 4.75% |
| September 18, 2024 | -50 | 4.75% to 5.00% |
| July 26, 2023 | +25 | 5.25% to 5.50% |
| May 03, 2023 | +25 | 5.00% to 5.25% |
| March 22, 2023 | +25 | 4.75% to 5.0% |
| February 2, 2023 | +25 | 4.50% to 4.75% |
| December 14, 2022 | +50 | 5.0% to 5.25% |
| November 2, 2022 | +75 | 4.5% to 4.75% |
| October 12, 2022 | +75 | 3.75% to 4.00% |
| Sept 21, 2022 | +75 | 3.00% to 3.25% |
| July 27, 2022 | +75 | 2.25% to 2.5% |
| June 16, 2022 | +75 | 1.5% to 1.75% |
| May 5, 2022 | +50 | 0.75% to 1.00% |
| March 17, 2022 | +25 | 0.25% to 0.50% |
Loan limits have increased for 2025. Each county in every state has its loan limit. That said, the new standard conforming loan limit is $806,500, and high balance limits in select high-priced areas can go up as high as $1,037,300 for 1-unit properties in 2024.
Visit our 2025 conforming loan limit pages for Washington State, Oregon, Idaho, California,, and Colorado.
For FHA loan limits for 2025, visit our pages for Washington State, Idaho, Colorado, California and Oregon.
Check out our mortgage loan limit tool for conventional, FHA, and VA loans.
Do you have questions about rates this week and home loans? Or are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, Colorado & California. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Our programs include the Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans. Contact us today with any questions you have about mortgages.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.