PULSE 08/14/2025: Mortgage Rates Hit 9-Month Low – Opportunity Knocks

This week’s episode of The Pulse and Perspective dives into the most favorable mortgage rate environment since October 2024 — and why it’s a pivotal moment for buyers, sellers, and investors. Pete D’Angelo breaks down the factors driving rates lower, the latest on inflation and Fed policy expectations, and how shifting real estate dynamics could create rare opportunities. From first-time buyer incentives to builder discounts, this is your market pulse for mid-August 2025.

Highlights:

• 📉 30-year fixed average down to 6.66%; 15-year fixed at 5.83% — best in 9 months
• 🏦 Fed expected to cut rates in September; debate between 0.25% and 0.50% cut
• 📊 CPI inflation at 2.7% YoY, with shelter and energy costs softening
• 🏠 Housing market rebalancing: 24.8% more active listings YoY, price cuts at a 7-year high
• 💰 Refinance applications surge 23%; total mortgage apps up 10.9% week over week
• 🎯 First-time buyer advantages: lender incentives, lower down payment acceptance, 0% VA/USDA options
• 🔨 Builder tactics: up to $25K in down payment assistance, permanent rate buy-downs, increased multifamily starts
• 📍 Regional shifts: Some metros cooling, others still tight — hyper-local market dynamics in play
• 🧠 Strategic takeaways for buyers, sellers, investors, and those eyeing new construction

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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

ThePulseAndPerspective_RadioFreeDelivery_08.14.2025

[00:00:00] 

You are listening to the Pulse and Perspective, hosted by me, Pete D'Angelo branch manager for rate. Located in Totowa, New Jersey, I assist individuals and families navigate in their journey toward home ownership. Each week I'll be providing you with valuable insights and updates on the real estate and mortgage industries.

Occasionally we'll be sharing snippets of interesting interviews with local professionals sharing their stories of real estate, business, and life. Enjoy the show. 

Pete: On today's episode, interest rates are at a nine month low. We're going to sample that and get into why, and then we're gonna spend a lot of time today talking about the pivotal moment that this is for the real estate market for 2025 and post pandemic. Let's get into it.

Pete: Welcome back [00:01:00] to the Pulse End perspective. I am your host, Pete D'Angelo, with your weekly mortgage and real estate market update for August 14th, 2025. Great news today everybody. We have the lowest rate environment that we've seen in nine months. This is going all the way back. To October of last year.

Pete: Here's some of the reason why we talked about it last week on the episode, so brief recap on that before I get into the latest and greatest. Last week we talked about how the Fed met. And then there was the jobs report and some of the concerns about the quality of the data of the initial releases. With that, the market then reacted with more expectations of a Fed rate cut in September, and the market reacts and anticipates the reaction of the Fed right now.

Pete: And so what we are seeing is what the environment would be with that rate. Cut. So the market's expecting a 25 basis point or [00:02:00] 0.25% cut on the Fed fund rate in September when the Fed meets, and that is translating to an average 30 year fixed rate mortgage according to mortgage news daily this morning of 6.66%.

Pete: That is. A survey across many lenders across the country, but 6.66% is the average 30 year fixed rate mortgage that's being offered in higher cost areas like New York, Metro area, Chicago, Boston, Los Angeles. Interest rates may be higher in those high cost zones, but across the country, interest rates could be lower than that.

Pete: So this being the average is quite frankly the most favorable rate condition that we've had. Since October, this is creating more affordability. This is helping. To be more competitive. You know what your maximum budget is to purchase a home and what you're comfortable with. Spending with an interest rate that's [00:03:00] now lower, and now we're getting very close to that 6.5% range, which means you could very well see interest rates quoted even lower than that.

Pete: And if you use discount points to gain a permanent discount on your interest rate, by paying a premium upfront, you can be seeing interest rates close to 6%, maybe even with a five handle on it. That's for 30 year fixed rate mortgages. We also saw the 15 year fixed rate mortgage average come down quite a bit.

Pete: That now is at 5.83% on average. Much more cost effective environment for those would be home shoppers out there. And if you are on the fence about selling your home, this could be a good opportunity for affordability right now. There are ways that you can leverage this. Prior to this episode today, I also took a look at some of the adjustable rate mortgages, and that is ranging with.

Pete: Leveraging discount points, you could be squarely in the middle of the 5% range by [00:04:00] paying some discount points on a five year arm. Based on just a couple scenarios that I ran this morning for compliance purposes, this was just to explore some possible loan programs that are available out there. Right now, your qualification down payment, credit score, and debt to income ratios will wind up being the deciding factor on whether or not these rates are available.

Pete: That being said, all of this is painting a much more affordable picture for housing right now. That's good news. We're gonna go to some of the reason why. So as of this past week, we digested the jobs report from the week prior that came out just. Just after this episode was released last week and now this week, we did get the consumer price index.

Pete: That is another inflation gauge. There's two inflation gauges. Consumer price index, personal consumption expenditure. The personal consumption expenditure is the [00:05:00] Federal Reserves preferred inflation gauge that. Yet to be released, but that is coming out shortly. I'll look forward to reporting on that. But the consumer price index is still an important gauge for us to understand where inflation is, and with the Fed focused on inflation and the job market, this is a big part of that picture and what is going to set the stage for their policy.

Pete: So taking a look at what that consumer price index was this past week, well the overall. Headline. This is taking a look at everything that's in these inflation numbers that came in 2.7%, year over year increase. So when you compare the cost of things from a year ago, the core, which now excludes volatile elements.

Pete: Think food energy, when we take that out, the core saw a month over month increase of 0.3%. That was just about at the expectation. [00:06:00] However, the year over year. Overall inflation number was better than what expectations were, and we saw a couple important things there within the inflation number, the shelter component that Rose 0.2% month over month.

Pete: We talked about that a few weeks ago. The shelter component's been part of the stickiness of inflation, so the fact that that came in where 0.2%, month over month kind of flat, that that's a good sign. Also energy down. So 1.1% month over month. So when we're looking at some of the more volatile things, we're seeing some improvement, and that may have helped get that headline number to be something more palatable and better than what the expectations were.

Pete: So if the expectations were for a higher interest rate environment, and that is not what we've gotten here, uh, we've seen something that's stagnating, albeit, I wanna remind everyone that the Federal Reserve's goal is for inflation to reach 2% [00:07:00] target. That's not where we are right now, and we're still a ways away from that.

Pete: Uh, you can kind of think of it as being analogous when you wanna lose weight and you can maybe drop the first 10 pounds quickly, but then that last five to 10 pounds could be really difficult and a really long process. Inflation is the weight of our country's economy right now, and it's taking a lot for that to start to, uh.

Pete: To develop and for us to start seeing us get through the plateau that we've reached with inflation being where it's, but things are better, things are stabilizing. We don't need to see the inflation go down very quickly. We just need to see improvement and stability. Tariffs continue to be part of the calculus that makes it difficult to manage.

Pete: But on balance, we're in a much better position right now. And we are seeing from last week, there are cracks in the labor market now this [00:08:00] inflation report. Okay, so it was a little bit better than what expect expectations were, but is that really enough to create this lower rate environment? Well, there was something else that happened, and this is within the past 24 hours, but, um.

Pete: Fed, fed chair, barkin. This is an individual who's a fed governor on the Federal Reserve. So Barkin on August 12th said there's uncertainty easing in and consumers are still a key part of the Fed's consideration and that they are well positioned right now. But he did make mention that there he is a proponent of possibly seeing a half a percent cut in September.

Pete: Are we getting flashbacks here? 'cause I know that I am. If we rewind the clock back to September of 2024, what did we see? A fed that held in bad labor data came in, there was an admission to poor labor data, and then they came out the gate swinging [00:09:00] with a half a percent cut in September. Personal opinion is half a percent's a little aggressive.

Pete: I think that, uh, if I were to paint the perfect picture. And the perfect picture within the context of for the American consumer and particularly the American home buyer right now. Perfect picture would be that the Fed lowers the interest rate only by a quarter in September, but their language but around future rate cuts is more positive about setting the stage for more rate cuts and admission to their possibly being a weaker job market than what was originally.

Pete: Understood from the data. And if they come out with that and we see Fed chair Jerome Powell make mention of that, now we've got a really good opportunity for possibly the lowest rate environment that we've seen in, in a couple years, maybe even going back to the beginning of 2024. And we saw interest rates really getting [00:10:00] close to and approaching the 6%, squarely 6% range for 30 year fixed rate mortgages.

Pete: The other thing to, to, to consider here is the lower interest rates and what's happening is creating a higher demand for mortgages. Right now we see from the data that gets reported, we have a 10.9% increase in week over week total mortgage applications, and that's the week ending August 8th. We're a little bit delayed on this data.

Pete: That can only be expected to go up. Now, over the past couple weeks, I know from my day to day, there's a higher activity, interest and, and, and volume of activity in my industry, from what I'm seeing and from my colleagues. In addition to that, refinance applications are up 23%. So now those who have purchased over the past year and a half, there is a cost savings opportunity.

Pete: Now, [00:11:00] here's the thing. The question becomes, do you take advantage now and start saving money and possibly refinance again in the future? If interest rates continue to go down, or do you hold out, suffer the payment for right now and see if interest rates are gonna continue to decline. History has not been kind to us on this.

Pete: Unfortunately, in the past, moments of relief like we're seeing right now with lower interest rates have been that moments, moments of opportunity, and then they've disappeared over time. Last year we saw the fed cut by one whole percent mortgage interest rates for 30 year fixed averaged up a half a percent counterintuitive.

Pete: But we've talked, this is because it's about the expectation. The market is anticipatory looking to see where the ball's going, not necessarily where the ball is now, and that created a higher rate environment. Because the Fed wanted to stay put. Well, this is different now. I think we're [00:12:00] really seeing cracks in the labor market.

Pete: Last year we got a peak this year with the revisions just from the past three months. We know labor market's not looking as strong as we originally thought, and as the Fed originally had the impression of what does this translate to though for buying a home or potentially selling a home? We're gonna get into what's going on in the housing market in a moment.

Pete: But with respect to mortgage applications increasing, this could mean that there's more competition, there's a new environment because there are more opportunities available. Inventory has been opening up over time. That's good. But now this little increase in competition could start to create competition in the higher inventory areas.

Pete: In North Jersey, the New York metro area, Boston, Chicago, if you're looking at those high volume metro areas, high interest, high value, well they're still not seeing, uh, [00:13:00] an influx of inventory like the rest of the country and where that's translated into a market where you can negotiate on price. Still very much a situation in the high competitive markets to be placing bids over asking.

Pete: But it's starting to soften, and I'm starting to see those very highly desirable homes starting to entertain, asking price or just a touch below, asking price. So there's softening, but this increase in demand just from two weeks ago, like I said, this is the week, well, last week really, this is the week ending April 8th.

Pete: That's last week. Rates are better now. What is that going to do to drive demand? We're going to see, and I'll keep you posted next week. But you can expect that now is probably a good time. If you've been on the fence, now is a good time to to talk to a mortgage professional. Reach out to me. I'm happy to help you out with any questions that you may have about planning this.

Pete: And then to briefly go back to the refinance opportunity, [00:14:00] your personal circumstances and your personal financial goals are going to drive that conversation. So it's very important to get crystal clear on what those goals are and then you can manage accordingly. And that's super helpful to professionals like myself, because what we wanna be doing is making sure that we're pairing you with the right financing program, with the right term, the right rate, the right time.

Pete: So moving on from there, we're now going to get into. The housing market rebalancing. There continues to be some movement and a shifting from a seller's market to a buyer's market. And that shift occurs where you start to get more center where it's more of a balance market. Now we're starting to see some pockets, some areas of the country where it is becoming a buyer's market, and you can negotiate on home price.

Pete: Sounds like a foreign concept to us here in North Jersey, but that is something that's starting to happen and it's even starting to happen. In our own backyard in certain markets. Let's get into this. Active [00:15:00] listings, 24.8% up year over year in July. That marks 21 consecutive months now of growth and over a million actives.

Pete: For 13 consecutive weeks, that means there's over a million active listings in the country for 13 consecutive weeks. 12 states are now above pre pandemic inventory levels. These states are Arizona, Colorado, Florida, Idaho, Texas, and Utah. Inventory's increasing. This is supply and demand. Now price points are going to adjust.

Pete: The time on market is up six days year over year compared to what it looked like in July of 2024, and we're starting to see the pricing strategy is shifting. 26% of homes saw price cuts. That's the high since 2018 and Delists are up. 48% year over year. When we compare June to June, [00:16:00] this is showing us that change is starting to occur in the real estate market across the country.

Pete: And this is opportunity because when we're in transition period, that's where your greatest opportunity is. The people who are decisive in these moments when things are changing and there's some uncertainty, if you are in a position. That you're comfortable with the risks that are involved. And when I say risks, well what if home values start to decline more because of inventory?

Pete: Well, you need to let your personal financial situation and your own personal risk tolerance dictate what's going to make sense. But what I can say generally is in these moments of transition. There is great opportunity and this could be a sweet spot. Right now the data's coming in. We're starting to see a softening happening in the real estate market by way of value and softening happening by way of more opportunity.

Pete: [00:17:00] Pairing that with the lowest interest rate environment that we've seen in about eight months. That is a bit of stars aligning. There could be good opportunity for you if you are someone who is possibly thinking about selling their home. This is important information to know. What this distills down to is the fact that you are real estate professional and choosing the right real estate professional to assist you with marketing your property and properly pricing.

Pete: The price of your home is part of the marketing, and that is an integral piece of the strategy you need to be rock solid on with your real estate professional and this changing market. This, in my opinion, is a great case for a, a great reason to have a real estate professional guide you in your possible home search and possible home listing.

Pete: Now, let's talk about first time home buyers because there now are some tailwinds. Not just [00:18:00] inclusive of what's going on with interest rates being at an eight month low first, we're starting to see more lender incentives, so that means professionals like myself, they're offering more incentives to first time home buyers, the way of kicking in for closing costs, offering discounted interest rates beyond the programs that are currently available, we're also starting to see lower down payment programs become more successful.

Pete: When you don't have to be as competitive in the market, you can afford to have a low down payment offer accepted. What that requires is working with the right mortgage professional, you're going to want to ensure, especially if you're putting a minimum percent down FHA three and a half percent conventional, 3% first time home buyer's home.

Pete: If you do that, you may not be a strong offer. But if you're real estate professional and your mortgage professional, like myself, do their job properly, they're [00:19:00] going to make sure that they communicate and put your best foot forward. Even if the terms of your offer are not ideal. IE 10% down 15, 20% down, things like that.

Pete: That low down payment approach is now becoming more successful in a market where you can negotiate. Thirdly. VA loans and USDA loans are two 0% down options that are still available and could be extremely beneficial. While these interest rates are lower, here are some of the headwinds, though, the pricing component, we're not seeing the home.

Pete: The median home sale price reduce. It's still growing. It's just not growing at a crazy rate. Right now, again, to reiterate, $371,300 was the median home sale price in June of 2025. Uh, typical savings target for first time home buyers and really anyone purchasing a home should be about 9%, uh, [00:20:00] including closing costs and reserves, uh, generating that kind of savings while inflation is still.

Pete: Something that's being managed could be difficult. So these are the headwinds. Overall opportunity is here. So as a first time home buyer, you have great opportunity in this market right now with the lower rate environment and a shifting real estate market. I wanna also touch upon the builder supply, and this is new construction homes because some things are starting to mix there.

Pete: And again, this is in response to a shifting market. I'm just checking the boxes of what we've been waiting for to know that, oh, well, real estate market's making a move and now could be a good time. The National Association of Home Builders, um, showed their index for confidence at 33, and this is the 15th straight month of below 50, uh, which is negative sentiment.

Pete: If their survey is above 50, it's positive sentiment, but it's still up [00:21:00] from 32 with the last reading. That means there's not a lot of confidence in building new construction homes. Pricing component is changing. That makes it more difficult to understand the profitability of building the new homes. What does that translate to for the buyers right now?

Pete: Well, there's pricing tactics. 38% of builders are cutting their prices. That's the highest amount since 2022. And. The incentives that they're offering are becoming much more ubiquitous. We're starting to see those home builders offering down payment assistance to the tune of 20 to $25,000. We're starting to see them offering permanent rate buy downs, so that's delivering financing through a preferred lender that the builder has.

Pete: They are going to assist the client with. Their mortgage process and the builders work down arrangement to offer well below market interest rates, sees something in the 5% range with no additional cost to the buyer. That helps with the affordability of the property, helps them to sell the property [00:22:00] at a higher price point because the buyer actually has a lower cost.

Pete: And you know, there's a way that you can calculate that to see what it would translate to if they were to do a price reduction for that buyer to have a comparable. Carrying cost for the property. So that's, that's another lever that they're pulling. Um, permits. Now this is interesting. Permits are down 6.3% year over year means the planning phases.

Pete: This is giving us a look earlier in the process for new construction that is starting to slow. The starts in June. So the number of new construction starts we're at 4.6% up, um, to 1.32 million as an annualized rate of new housing starts, which is down for the third month. Um, multi-families also up 30% month over month, looking like it's more lucrative to build multifamily.

Pete: The implications for this. There's new inventory that's being created in some markets, and that could be good [00:23:00] opportunity for value. They're throwing a lot at you to entice you as a buyer. That sounds like a buyer is in the better and stronger position there. So definitely explore those if those are opportunities in your marketplace.

Pete: Now we're gonna take a look at the whole region regional aspect of real estate. Uh, there's a cooling occurring, so we're gonna first start off the inventory Growth leaders, Nevada. Up 52.9%. Maryland's up, 48.2% in North Carolina. Starting to normalize the pricing. 20% of metros are now seeing annual declines, so Austin.

Pete: Down 15% versus three years ago. Uh, supply is also shifting. So Miami active listings are down 19% versus the 2022 peaks. And the, the local dynamics there are what's constraining the, the selection for inventory right now. [00:24:00] We've talked about a couple different states so we can get a little more localized and you can see that state by state.

Pete: This is something that's. Very different. So even within your local real estate market, and I, I'm going to just talk to North Jersey right now, things are hyper localized. So it's very important to stay in the know about what's changing in that market that you may be interested in, because it could be very different from just down the road.

Pete: So keep it, keep that in mind. Things have gotten hyper localized. So now we're gonna wrap up with some strategic takeaways. First, for our buyers out there, credits are available. New construction interest rates are at an eight month low. That's an opportunity. You can leverage permanent buy downs, and that can possibly put you in a position.

Pete: You can have an extremely low interest rate and be what I'll call refi proof. [00:25:00] And what I mean by that, you will not be enticed if interest rates go down because you paid the premium at closing to lower what your monthly cost is permanently. So let's say for example, you could get a six and a quarter interest rate rate with some buydown, but increase your permanent buydown.

Pete: You can maybe get 5.75. You may not have to worry about where the rates are. In a year from now, you may not need to refinance. We don't have a crystal ball, but the lower the interest rate is that you have fixed right now, the higher likelihood you may not need to refinance without there being some radically different economic environment to contend with.

Pete: For the listing agents and for the sellers out there, inventory's rising. That means for the first time in a while, more competition for you. As listing agents and also as sellers. This could be your call to action where [00:26:00] if you've been on the fence about listing your home, now could be the best time to do so because days on market are increasing, may take longer to sell your home, and you may not be able to sell your home for the amount that you thought that would've been possibly appropriate even two months ago.

Pete: Things are changing rapidly, and so if you've been on the fence, I feel strongly in recommending that you speak with her. Real estate professional about your options right now and what a pricing strategy would look like in this changing marketplace for the investor, the real estate investor out there.

Pete: Opportunity is there full tilt. You can go into different marketplaces and different areas, and I think you're going to realize more value and less value in certain markets. So really it's going to come down to where you have the most experience and knowledge about the market. And the financing components getting cheaper.

Pete: So this is going to be helpful for identifying good [00:27:00] opportunities. Maybe cash flow isn't a top priority right now. I know there's a number of real estate investors I work with that they're not particularly interested in cash flow right now. They just wanna have a property purchase, but the fixed price and their interest rate that they can later reduce when that time and opportunity comes.

Pete: For buyers and also those shopping for new homes. Buyers, this is a great opportunity. Interest rates are at an eight month low. You can take advantage of this right here, right now. Talk to a mortgage professional, give me a call. Happy to help you out with anything and for the new homes. If you're shopping for a new construction home, great opportunity.

Pete: Go check it out. There's possibly some incentives there for you. Um, with the new home inventory, as this is being rolled out in the markets where it makes sense and there's space for it. Northern New Jersey, there's not a lot of space to build, but in other marketplaces, out Pennsylvania and some areas of New Jersey, new [00:28:00] construction is possible.

Pete: Keep an eye out for that. Why does all of this matter? Well, the landscape is changing. Maybe we're going to start to see a more permanent change to the landscape. This is something we're going to have to take. A very close look at on a regular basis. That's why I'm gonna continue delivering these updates for you on a weekly basis.

Pete: That's all for the show today. I hope you found this information helpful and useful. I'll be looking forward to getting you another update next week. But in the meantime, take good care.