Welcome back to Mortgage Porter Weekly! This week we’re covering the Fed’s decision to hold rates steady, what to expect from Friday’s jobs report, and a big shift in condo financing that takes effect today. Watch the video above, then read on for the details.
Recap From Last Week
Last week the Fed held interest rates steady, keeping the Fed Funds Rate unchanged at 3.50% to 3.75%. While this rate doesn’t directly set mortgage rates, it shapes borrowing costs across the economy. The decision was expected, but the vote wasn’t unanimous — three Fed officials pushed for a quarter-point hike instead, pointing in part to the war in Iran and the on-again, off-again talks as a source of inflation risk they’re watching closely.
The Fed continues walking a tightrope: bringing inflation back to its 2% target while not adding pressure to a labor market that’s showing some signs of slowing.
On inflation, Personal Consumption Expenditures cooled slightly in June, with annual inflation easing to 3.7%. Core PCE, which strips out food and energy, also improved to 3.3% annually.
Housing data stayed strong. Case-Shiller showed home prices up 0.6% from April to May, while the FHFA Home Price Index showed a 0.8% increase in May. Both point to continued momentum in home values this spring.
Second quarter GDP grew at an annualized 1.5%, a touch below expectations, with consumer spending, exports, and business investment offsetting softer government spending and higher imports.
Mortgage Rates: Optimal Blue Index
Optimal Blue reports the average 30-year fixed rate as of last Friday, July 31st, at 6.7% — up slightly from what I shared with you last week.
Just a reminder: this index reflects about 35% of mortgage transactions, from lenders who use Optimal Blue. It’s not a rate quote — you can’t lock in last week’s rate today, and your credit score, loan-to-value, and other factors will affect what you actually qualify for. This is intended to show how mortgage rates are trending. I’m happy to provide you with current mortgage rates based on your personal financial scenario for a home located in Washington state.
Economic Calendar
It’s the first week of the month, which means it’s Jobs Week. Markets are expecting ADP to show about 70,000 jobs created in July, with the BLS report coming in around 83,000. The unemployment rate is expected to tick up slightly to 4.3%. These aren’t strong numbers — but with expectations already low, a weaker print could actually help mortgage rates improve.
Here’s what’s on deck this week:
- Monday: PMI Manufacturing
- Tuesday: JOLTS
- Wednesday: ADP Employment, ISM Services Index
- Thursday: Jobless Claims
- Friday: BLS Jobs Report
The next FOMC meeting is September 15th and 16th.
In the Spotlight: Condo Financing Changes
Big changes are here for condo buyers and owners. As of today, August 3rd, the “Limited Review” process for conventional condo loans is officially retired. That was the streamlined path used for roughly 40% of all conventional condo loans — going forward, established projects will need either a Full Review or a Waiver of Project Review.
Full Reviews mean more documentation from the association: questionnaires, budgets, insurance certificates, and meeting minutes. What this means for buyers: expect more paperwork, more back-and-forth with HOAs, and potentially longer timelines. If you’re writing an offer on a condo, build that into your contingency timeline.
There is some good news, though. The Waiver of Project Review now applies to condo projects with 10 or fewer units — up from just 4 units before. So if you’re looking at a boutique building, a converted fourplex, or a small urban infill project, financing may actually be simpler than it used to be.
If you own a condo, it’s worth making sure your HOA is on top of these changes — it could affect resale value if your building ends up limited to non-warrantable financing. I’ve got the full breakdown, including a timeline of every change taking effect through 2027, in this post on condo financing changes.
Let’s Talk
If you have questions about your specific scenario — buying, refinancing, a retirement mortgage, or just figuring out your options — I’d love to hear from you.
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