Mortgage Rates This Week – July 24, 2024

Mortgage rates are flat this week, hovering around their lowest levels since early March, as the markets await Friday’s important (PCE) Personal Consumption Expenditures Price Index, which is the Fed’s favorite measure of inflation. The 30-year fixed rate currently sits at 5.875%, 6.136% APR with points, and 6.500%, 6.544% APR with 0 points for borrowers with excellent credit and 25% down on a Single-Family Primary Residence.

The QCEW (Quarterly Census of Employment and Wages) released their Q4 job revision data, which showed the BLS overstated the number of jobs created in Q4 of 2023 by 293,000, which is almost half of the total 637,000 job creations the BLS reported. While this data is now old, it gives us insight into the accuracy of the BLS jobs numbers that both the Fed and the bond markets look at when determining rates. Given that this trend of overreporting has continued in 2024, it brings into question the validity of the BLS employment figures. Many have been saying the true employment market isn’t as strong as the data suggests, and in retrospect, it appears they were right.

Market-moving data will be released later this week, starting with Thursday’s Q2 GDP report. The markets expect solid annualized growth to come in north of 2% as the overall economy continues to show no signs of sliding into a recession. On Friday, we get one of the final and most important reports of the month: the Personal Consumption Expenditures Price Index. Many economists expect this report to show that inflation continues to cool and move closer to the Fed’s target of 2%, which will help continue the trend of lower mortgage rates.

Stronger-than-expected retail sales numbers temporarily pushed rates higher early last week; however, the move up was short-lived as comments from numerous Fed members, including Fed Chair Powell, indicated increased confidence that recent data would allow for a rate cut later this year. Powell’s speech yesterday acknowledged that inflation was heading towards the target goal of 2% while also discussing weakening employment and the slowing of the overall economy. He said his biggest concern is cutting rates too soon, allowing inflation to increase again more than cutting too late and causing a recession. For those desiring lower long-term rates, including lower mortgage rates, this is good to hear as the Fed cutting rates aggressively too soon could temporarily help rates move lower, but not for long as they would shoot back up likely higher than current levels if inflation moved back up as a result.

Also helping keep rates down was rental price data from the Cleveland Fed, showing shelter cost increases slowing. The shelter component of both CPI and PCE have remained stubbornly high even as real-time data from services like CoreLogic show rental price increases slowing significantly. The Cleveland Fed data usually aligns more closely with the numbers from the CPI and PCE report, so hopefully, this will be reflected in the inflation reports as we head into fall.

The Consumer Price Index (CPI) report showed that inflation declined -0.1% in June, below estimates of an increase of 0.1%. Annual inflation moved lower from 3.3% to 3.0%, which was also better than estimates. The Core rate, which takes out volatile food and energy prices, was 0.1% higher for the month and down to 3.3% from 3.4% year over year. Mortgage rates moved lower as inflation increases finally slowed after several months of stalling out.

Following the CPI report was the Producer Price Index (PPI) report, which measures wholesale inflation. This report came in hotter than expected, which limited the decline in mortgage rates following the CPI report. Wholesale inflation tends to be more volatile and not looked at as closely as CPI; however, some components of PPI make their way into the PCE inflation report, which comes out later this month and is the Fed’s favorite measure of inflation.

Earlier this month, data showing a softening labor market helped lower rates, reversing a rising trend we saw to finish June. The Bureau of Labor Statistics (BLS) reported 206,000 jobs created in June, which was slightly above estimates; however, following a trend, we continue to see revisions from the previous two months, totaling 111,000 fewer jobs added than what was originally reported. The BLS has continued to report high initial employment data only to adjust the numbers lower in subsequent reports. Additionally, the unemployment rate rose from 4.00% to 4.10%, which is the highest since November of 2021.

The June ADP Employment report showed 150,000 jobs created below estimates of 160,000. Wage inflation also showed signs of improvement as ADP reported that job stayers saw an increase of 4.9%, down from 5%, and job changers saw an increase of 7.7%, down from 7.7%, reaching the lowest level in almost three years.

Government spending continues to pressure rates, as the Congressional Budget Office reports that US government spending continues to rage out of control. Original estimates for the fiscal deficit were at $1.6T; however, the most recent estimate surged to almost $2T, meaning the US government has to borrow $400 billion more than previously expected. This additional debt supply negatively impacts interest rates as more supply has to be absorbed.

With spring behind us, the slower summer months are here. Many clients trying to purchase are finding less competition than they did a few months ago, although multiple offers are still happening on competitively priced homes. Clients who choose to get a fully underwritten preapproval are seeing more success in getting offers accepted on high-demand homes.

To find the lowest possible rate, compare different lenders and collaborate with a company that offers transparent mortgage rates and costs online. Experienced Mortgage Advisors and Loan Officers can guide you through the current market conditions and chart the best course forward.

Current Mortgage Rates This Week for WA, OR, ID, CA, and CO From Sammamish Mortgage
07/26/2024

**Conforming assumptions – $800k Purchase Price, 25% Down, 800+ Credit
**Jumbo assumptions – $1.5MM Purchase Price, 25% Down, 800+ Credit

Washington State mortgage rates

Mortgage rates In Oregon

Mortgage rates in Idaho

Mortgage Rates for Colorado

California Mortgage Rates

National Average Mortgage Rates:

(State-specific rates sourced from Sammamish Mortgage – National Average rates sourced from Zillow)

Consumer Price Index, Consumer Sentiment & Inflation

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 running well above the Fed’s annual target of 2%, pushing the Fed’s hand to raise short-term rates to slow things down. While current numbers remain elevated, we expect a significant reduction in the inflation readings in the coming months as various factors moderate the pace of inflation.

Consumer Price Index (CPI) June = -0.1% – Annual = 3.0%  

Producer Price Index (PPI) June = 0.2% – Annual = 2.6%

Personal Consumption Expenditures (PCE) May = 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.

See Current Rates

What the Fed rate hike means for borrowers, savers, and investors

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.

Loan Limits Increased For 2024

Loan limits have increased for 2024. Each county in every state has its loan limit. That said, the new standard conforming loan limit is $766,550, and high balance limits in select high-priced areas can go up as high as $1,149,825 for 1-unit properties in 2024.

Visit our 2024 conforming loan limit pages for Washington State, Oregon, Idaho, California,, and Colorado.

For FHA loan limits for 2024, visit our pages for Washington State, Idaho, Colorado, California and Oregon.

Check out our mortgage loan limit tool for conventional, FHA, and VA loans.

Instant Mortgage Rate Quote

Ready to Apply For a Mortgage?

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.

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