The news in the week ending July 24 was generally positive for the monthly reports, but the weekly data suggests that July’s numbers will feel the pinch of rising prices and interest rates for consumers and businesses.
Consumers and businesses are seeing fuel prices on the rise again to levels erasing the improvements seen in April. This will reignite inflation concerns and alter spending behavior as consumer discretionary spending once more is reduced and businesses have to pass through increased costs. For consumers, some of the spending related to back-to-school discounting and tax holidays may be critical to nondiscretionary items purchased in late July and early August.
The Freddie Mac weekly average rate for a 30-year fixed rate mortgage ticked 6 basis points higher to 6.55 percent, the highest since 6.56 percent in the August 28, 2025 week when it was 6.56 percent. The weekly average for a 15-year fixed rate mortgage was up 11 basis points to 5.93 percent, its highest since 5.92 percent in the July 17, 2025 week. Consumers remain very interest rate sensitive when it comes to purchasing a home. It will likely take better supply of the more sought-after housing units and moderation in prices to encourage homebuying. If inflation meaningfully pushes up rents, there may be an increase in renters looking to buy. Many of these will look at entry-level multi-unit properties as they did during the pandemic-related housing boom.
While measures of inflation expectations in July moderated for the near-term, these are likely to rise again when the August reports are issued.
