PULSE 08/07/2025: Rates DROP, Data Doubts & Your Mid-Summer Reality Check

📉 Mortgage rates just cracked their year-to-date floor, sliding into the mid-6 percents—even dipping to 6.45 % at a few lenders. In this week’s episode of The Pulse and Perspective, Pete D’Angelo unpacks why a weak jobs report, downward revisions, and a five-month manufacturing contraction lit a bond-market fire that’s cooling borrowing costs.

But there’s a twist: the very data the Fed swears by is getting revised out from under it. Pete breaks down the “data dilemma,” what a 258 k downward jobs revision really means, and why shelter costs may keep inflation sticky until the Fed blinks. 🧐

🏡 What you’ll learn:

• How today’s 6.6 %–6.7 % 30-year rates reshape affordability—and who should lock now
• The labor-market “cracks” that sparked the bond rally and what could yank rates back up
• Why investors no longer trust first prints—and how that volatility trickles to housing
• Two opportunities buyers have RIGHT NOW as inventory climbs 25 % YoY
• Smart seller strategies when 50 % of homes are closing below list

Stick around for Pete’s rapid-fire tips for buyers, sellers, and fellow mortgage pros—and a personal update as the D’Angelo family gets ready to welcome a new arrival! 👶

🔔 Like, subscribe, and share to keep your circle on the pulse of the market.

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Peter D'Angelo | NMLS: 885309 | Branch Manager | Guaranteed Rate, Inc., NMLS 2611
Peter.DAngelo@Rate.com

*All information, topics, discussion is my own personal opinion and insight, not reflective of Guaranteed Rate, Inc. May contain market information for informational purposes only, not to be used as financial advice.

Transcript

Podcast_08.07.2025-UPDATE_VIDEO

 [00:00:00] 

Welcome back to the Pulse and perspective with me, your host, Pete D'Angelo, with your mortgage and real estate market update for today, August 7th, 2025. I got great news today, and I don't get to do this often. I haven't been able to this year, but mortgage rates have gone down quite a bit and they're in one of the better levels that they've been year to date.

Where are we at right now? 30 year fixed rate mortgage is averaging anywhere between 6.6% and 6.7% with some banks and lenders quoting as low as 6.45% likely including some discounts for that, but that is available right now. This is the best rate environment that we've seen this year. In addition to the 30 year mortgage rate improvement, we also have seen improvement on the 15 year fixed rate mortgage that now is [00:01:00] averaging somewhere around 5.6 to 5.7%.

That is creating affordability, which is something that we've desperately needed. We know from the past that when interest rates start moving down into the 6.5% range, it really starts opening up PA buying power for the first time. Home buyers really, but anybody looking to purchase, whether you're selling your home and purchasing a new home, or you're a first time home buyer, that affordability is meaningful.

That paired with some. Shifts that have been occurring in the real estate market presents quite a bit of opportunity, and we're going to get into that a little bit later. But for now, interest rates are lower. Why did this happen? It's been a couple of reasons why over the past week, just after my episode on Thursday, last week, we got the jobs report and that came in at a miss.

We're gonna delve into that. In detail in a moment, but that miss was enough to show investors that the labor market isn't as strong as the data has been [00:02:00] suggesting. So. Everyone has this flight to safety in the market. So we've talked about this in the past, people investing in the real, in the stock market.

Equities market more volatility there. The bond market less volatile. You get a little bit more of a stable return, albeit it's likely not as much as you could possibly yield by investing in the stock market. When data comes through like this, that shows that there could be issues in the economy in the future.

Investors will move money from the stock market to the bond market. The more buyers you have in the bond market, the more the yields go down because you have more competition to buy those bonds, those bond yields have gone down, and that creates a lower lending environment because the bond yields are very closely tied to that.

With that being said. Can we expect this to persist? That's a loaded question. What I can tell you is this, until [00:03:00] we see another report that may come up that may show a better picture of the economy, that the economy's a little bit stronger. Perhaps we can see this rate environment persist for the next couple weeks.

But it is still very volatile. All it will take is a very strong report that gets furnished and we could see the market move in another direction, and we could see interest rates go up. We've been staying range bound. We talked about that last week. So now we have tested the lows of that range and now we've pierced it.

So for the foreseeable future, in my opinion, we're going to be pushing and putting pressure on the low end of the interest rates that are available for the near future, or at least until the next Fed meeting or a Fed member makes a comment and, and could be interpreted by investors. Now, I mentioned the jobs report that was a main driver for this lower rate [00:04:00] environment.

We're gonna get into the details of that now. The jobs report was furnished on Friday last week, and that showed 73,000 jobs added. The expectation was. 115,000. Now that in and of itself, okay, there was less jobs added in the summertime. Maybe there's less turnover, maybe there's less available. Okay. We can maybe give that a pass.

And in the past when we've seen a miss like that, yeah, we've seen rates go down, but then they may have popped back up again because there's additional stronger economic data and, and these are all of the things that influence interest rates. But this is also on the heels of a couple other things that were released.

May and June jobs data was revised downward to the tune of 258,000 jobs. What does that mean? Jobs that were reported initially in the May and June jobs reports were 258,000 jobs more than they actually determined when they revise [00:05:00] that data. So now. 

We're gonna talk about the data dilemma that we currently have, but before we get there, let's finish up about the jobs report. The jobs report also is showing us cracks in the labor market. The Federal Reserve just said on Wednesday that they are remaining data dependent, and as long as the economy is still showing stability and the job market.

It. That was a very important point that Fed Chair Jerome Powell made mention of, as long as they still see consistency and strength in the labor market, they don't have a reason to cut the Fed fund rate. I'll remind everyone again. Two Fed governors were in favor of a quarter point cut at the last meeting.

That is what I mentioned last week, is that they want to say, I told you so. It didn't take more than 48 hours after that fed meeting, they have the ability to say, I told you so now, because this jobs report and the revisions from the prior couple months show us that the job market and [00:06:00] maybe the economy isn't as strong as the Fed has been seeing in the data.

Now it's. Take a look down the line with this, right? If the jobs report is showing us that there's cracks in the labor market and there's a softening in the strength of the economy and for the American consumer, 'cause the American consumer can only consume as much as their wages and their job will afford them to, and that also has implications for the real estate market.

This may be the one element that could possibly temper how much activity will happen in the real estate market. If and when we start to see even more meaningfully lower interest rates. I've said in the past that I'm a proponent of the perspective that moving forward when interest rates reduce, I'm pretty confident now more so than ever before that we are imminently going to see some more lower interest rates.

My personal opinion and. My [00:07:00] concern was if we start to see lower interest rates very quickly, we're going to see an influx of buyers again in the buyer pool. And what that could do in the competitive markets is we're gonna talk about the real estate market and what's been going on there. But in the competitive markets, we could possibly see incredible competition again, because people can afford more interest.

Rates are lower, the common buyer is going to be able to afford more. Bringing more competition to the table, the people who would sell their homes would be more likely to sell because they can palate. It's more palatable now, I should say, to have, a 6% interest rate or a 5.8% interest rate when compared to their three and a half percent interest rate that they may currently have that may be more palatable for them, especially considering how much equity they have.

Now, the buyer pool widens now there's a lot more competition again. This jobs report could be tempering that a bit because if the American consumer loses [00:08:00] their job and it reduces the ability to afford, that could counterbalance the competition. So this is something that I'm looking at fundamentals here and I'm thinking through it by way of teasing out and steel manning how this situation could unfold.

As we end out the year, that's something that I think would be important for us to keep our eye on. Now, let's talk about that data. I was mentioning that there's now possibly some concerns about the quality of the data, and if the Fed is remaining data dependent, this is an extremely important distinction.

If the Federal Reserve is looking at these data reports to get a look at the economy, and they're getting revised by large margins. Now the Fed has to really take that into consideration as to how valuable is this in making decisions for their monetary policy. What we saw. From May and June, that revision, it's reminding [00:09:00] me of what happened last year, and I said it last week.

On the update. I'll reiterate. We saw a big revision on the jobs report. This was the Bureau of Labor and Statistics came out that they overstated job openings from April of 2023 to March of 2024 by almost 880,000 jobs. That's what they reported out. It's reasonable that it could be more than that, but that's what the official report was.

It's almost a million jobs that they said, oops. We kinda said there was a lot more available than there really was. Meanwhile, the Federal Reserve didn't do anything to interest rates because they thought the job market was so strong. Are you seeing how this is problematic for us? This is an issue.

Because of that, now the Federal Reserve's losing a little bit of confidence in the data that they're getting initially. Now the revisions are becoming more important as if the Fed already didn't have a mammoth job on their hands by trying to stay [00:10:00] topical and what's the latest and greatest? Now they can only really rely on data that's two to three months old.

That puts them in a position that they're not going to be able to effectively enact proper policy to respond quickly to the market. And let's be honest, everything moves at breakneck speed now. It's insane. If they're trying to stay ahead or at least keep stability, they are now in a position squarely that they are behind the eight ball and going to be reactive, exclusively reactive, and they're not really in a position to be proactive about their policy.

Something else to highlight with these issues in the data. When we got these revisions, this shows us that this is the lowest 0.7 month decline in perceived job availability since March of 2021. This is, that's pandemic that's [00:11:00] coming out of 2020 and into 2021. We're in the throes of the pandemic there to remind everyone of what that environment was like.

That's weakness in the job market big time. The official optimism of the economy and the job market is decreasing precipitously now, and investors are cautious in interpreting what that initial data is. I was talking about the Federal Reserve, you know, who responds immediately to data the market. And if the initial job data that we saw, you know, getting revised here and any other economic data that initially gets published.

Now investors may not be as quick to respond and react to that, but they're gonna take that into consideration. So that's gonna, just going, that's just going to create more volatility. As things progress here. So it's really going to be important for us to keep our eye on the ball on a daily and weekly basis like we've been doing.

So the takeaway from all of this is. Could be distilled [00:12:00] down as simply as this. We need to be very cautious about what we're hearing as headlines and what we're hearing in the news. And what we have in front of us is the most valuable thing that we have. And what I mean by that is if you're a buyer, a would-be home buyer, a real estate professional, and you're in the market.

You need to just assess what's in front of you. Speculation is very difficult right now. It's difficult for the professionals that speculate for a living. So I wanna just make that point and contextualize that for everybody moving on in the data. There was also something else that kind of helped us keep these interest rates low this week, and that was some manufacturing data.

Producer Manufacturing Index and the, index for services manufacturing. So this all came out and it showed contractionary, which means, you know, there's a slowdown occurring. This is also the fifth straight month of contraction. These data reports, and that's even considering revisions.

So [00:13:00] that means there is some weakness starting to show in the economy this isn't cause for alarm, but this is giving us a better representation and a more accurate representation than maybe we've been led to the belief. I have seen this happening and I couldn't make sense of it, and now it's starting to make sense.

And what I mean by that is. I couldn't understand looking at the data as regularly as I do to provide you with these updates on a weekly basis. And then talking to American consumers, I've been talking to people who've been interested in buying homes, who've been interested in refinancing, who've been interested in consolidating their debt, and I couldn't understand how we're getting these data reports that are showing that the market is doing so well.

But the people that I'm talking to. On a regular basis are struggling and a lot of people are struggling. The average American is struggling right now in this economy with inflation being what it is for the cost of things [00:14:00] and for the cost of services, and then for housing with, with rent, prices have been doing and with home values, with paired with interest rates.

So the picture now is becoming a little bit more clear and the dissonance that I felt is making more sense. And now it seems like, ah, okay, the dissonance was happening because there was a tangible issue between the data and reality. So that is something I wanted to touch on with respect to this week.

That's what helped to keep the interest rate market stabilized at the lower level. It will remain volatile though, opportunity is here right now. And why do I say that? Because there's shifts happening in the real estate market and that trend is continuing.

So continuing over, over the past couple weeks when we take our little snapshot. Taking a look at the June National Association of Realtors existing Home Sales Data here's some of the key points. Again, I want to [00:15:00] reiterate. The national median home price and home value rather, is $364,147.

That is up 0.5% year over year. It's up, but a lot slower pace than we've seen in years past the median list price when someone's. Ready to sell their home. That's coming in at $416,600, and that's as of the end of June. Active listings are up 25% year over year. Opportunity number two, so interest rates, opportunity number one, more inventory opportunity number two.

Now 30% of sales. Thereabouts, are still above list price. So whatever it's listed for, it's selling for higher, but 50% now are below. And that's shifting the leverage and that's shifting the, the power distribution in the market going from a seller market to a more balanced market, which could be [00:16:00] on its way to more of a buyer'ss market.

This is looking nationally. The real estate market is much more hyper-local these days. July existing home sales came in at. 1.3% up, and that's the first gain after a four month slide. So this is showing improvement. There's been more activity. New home sales are up 10.6% month over month. Buoyed by incentives.

We talked about that in the past. There's more getting kicked in by sellers right now to make buying the new homes, the newly built homes, more appealing and more affordable by way of offering credits for. Closing costs, discounted interest rates and permanent buy downs that the contractors and developers are adding in so that, you know, we just talked about the average 30 year fixed rate mortgage today, say 6.6%.

Some of these builders could be [00:17:00] offering you 5.99% because they are kicking in to lower the interest rate for prospective buyers to make buying a little bit more appealing. Because even kicking that in, the most important thing for them is what they are selling that property for. So if they can create the affordability, not by reducing the price, but by reducing the cost and creating more affordability for that price.

Boom, win-win scenario, buyer gets a lower monthly payment, lower carrying cost seller, developer, they get more money for their property and that's keeping those new construction prices higher. If we're gonna see if that continues like that, because this could be a short road in a transitionary period.

This could be the fix for now. But then as time goes on, it may reach a point where the sellers and the developers for new construction may not be able to offer as much incentive. So we'll have to see. The buyers are still gaining ground because of the affordability from interest rates like we've touched on.

And the [00:18:00] sellers need to be more strategic now. And if you are someone who's interested in selling your home, it's really important to have a very honest conversation with your real estate professional and with your real estate partner. They are going to give you the best guidance possible in understanding your market.

You may have an idea in mind of what you think your home is worth, but a shift has been occurring, at least for the past 30 to 45 days. So in the very short term, there's been shifts, which means reassessments required, and you need to have the right strategy, strategies going to be of paramount importance for your success, hands down.

So really lean on the pros. To guide you in the proper pricing strategy to sell your home and marketing strategy for those buyers out there. I think I've said it, that we have these moments of opportunity. This is another one. This is a [00:19:00] great one. Right now, interest rates have improved and I want to clarify something 'cause I wanna also respond to what I've noticed when I'm on social media watching the news.

When I'm mentioning that there's a great opportunity happening right now, I'm gonna share with you why I am saying it's a great opportunity within the context of what this real estate market has looked like for the past two to three years, what the interest rate environments look like.

I can't tell you if this is a good opportunity right now. With respect to your own personal financial situation, I believe that your personal financial situation is the most important element in assessing this because unless you are a bonafide real estate investor, speculating in this market is near impossible because things are changing so rapidly and so quickly, 

Let's zoom out for a moment. We have not had a normal real [00:20:00] estate and lending environment from 2008 till 2020. We started to get peaks at normal little picture from 2018 to 2019. Was it interest rates were creeping up.

We started seeing 'em go up with a five handle on them, low fives in that time period. Then the COVID-19 pandemic happened. All bets are off now. That was another monkey wrench thrown in. So just as we were getting into a normal-ish area, things changed. So it. Really difficult to speculate. The best that we could do is just understand what can we afford Now, does that make sense for us?

And what I'm providing you with is the objective look and historical look. That right now is an opportunity because this is the best affordability that we've seen in quite a while. Now, here's some strategic takeaways. Four. Buyers and real estate professionals rate dips opportunity. We just went over that.

The labor and data volatility [00:21:00] is now a major driver in the market, so be prepared for volatility. The volatility begets volatility. Sellers. Again, pricing and concessions should possibly be part of your strategy. If your home's not selling, lean on your real estate professional. They are the best at what they do.

They will guide you properly. Buyers, more time and patience is still required, but there's more opportunity in localized markets. It could be a different story. For the buyers, it's important to pair with the best real estate professional to guide you on that journey. They're going to know that market inside and out.

You can go, I'm. Here in northern New Jersey, you can go from where I am in Toto in New Jersey over to, let's just say Wayne, and it's different markets. Then you can go to Fairfield and Cedar Grove, and now those are even more different markets and the competition element in those I just mentioned are high.

But now let's go. Let's go out to [00:22:00] another market. Let's go to, let's say, you know, union County, lower Union County, or Central Morris County. There are some markets there, and in South Jersey even, where you're seeing buyers able to place offers and win homes below. List price or. Sellers are getting list price, and that is sufficient.

We're not seeing 10, 20% over list. It's hyper localized, so really lean on the professionals to get your best picture of the current state of affairs. Lastly, the Fed decision right now is going to be in September. That's the next time that they meet. We know that they held it steady. The market right now is pricing a 94% chance that they're going to cut interest rates, 94%.

It's a darn near certainty, but there's still data that could be released that could change that narrative. I will keep you posted on a weekly basis, um, [00:23:00] but for now. Let's just understand that we could very well see lower rates as we close out the year, which actually may create a little bit more opportunity further into the fall and winter than we normally see.

So that's it for our show today. I hope that you found this information helpful and useful. There was quite a lot to cover. If there's anything that you're particularly interested in, I encourage you to reach out, like, subscribe, share the show with anyone that you think would benefit from these updates.

I am looking forward to next week's update and also just a little bit of housekeeping. My wife and I are expecting the arrival of our daughter. Uh, really any day now. So, um, I may not be here every Thursday. I'll keep you posted on that, but, we're very excited and I'm still going to do my best to provide you with these updates moving forward.

And as my wife and I get used to the new life together with our new family, I hope you all have a wonderful weekend and take good [00:24:00] care.