Mortgage Market News: Inflation Holds, Home Sales Gain Momentum
The latest reports show inflation holding steady, jobless claims easing slightly, and home sales picking up steam as mortgage rates trend lower. Here’s what you need to know if you’re buying, selling, or refinancing.
Fed’s Key Inflation Gauge Holds Steady
The Fed’s go-to inflation measure, the Personal Consumption Expenditures (PCE) Index, rose 0.3% in August, lifting the annual rate from 2.6% to 2.7%.
Core PCE, which excludes food and energy, rose 0.2% for the month and stayed at 2.9% year-over-year.
Why this matters for you: Inflation is still above target, but signs of slowing growth are appearing. That tug-of-war is why the Fed cut rates on September 17 and hinted at more changes ahead. The Jobs Report on October 3 could help determine whether rates shift again at the Fed’s October 29 meeting, and that could directly influence mortgage rates.
Jobless Claims Decline Again
Initial jobless claims fell to 218,000, marking the second weekly drop after hitting a four-year high. Continuing claims also dipped slightly to 1.926 million.
Why this matters for you: While fewer people are filing new unemployment claims, many are still struggling to land new jobs. A softer job market could keep pressure on the Fed to cut rates further—good news for buyers looking for lower mortgage payments.
Existing Home Sales: Nearly Flat, But Relief Ahead
Existing home sales slipped 0.2% in August, holding at a 4 million annual pace, according to the National Association of REALTORS® (NAR). Inventory fell slightly from July but remains 11.7% higher than last year.
Why this matters for you: These numbers reflect closings when rates were still high. With today’s lower mortgage rates and more inventory than a year ago, buyers may see better opportunities ahead.
New Home Sales Surge
New home sales jumped 21% in August to an annualized pace of 800,000 units, the fastest since early 2022. July’s numbers were also revised higher.
Why this matters for you: Lower mortgage rates are fueling demand for new construction. But keep in mind, only 124,000 out of 490,000 new homes were completed and move-in ready. Many buyers will still face limited options when it comes to finished homes.
Q2 GDP Surpasses Expectations
The economy grew 3.8% in Q2 2025, up from 3.3% in earlier estimates and rebounding from the 0.6% drop in Q1.
Why this matters for you: Stronger growth signals economic resilience, but long-term growth is still moderate. For homebuyers, steady economic health supports confidence, but interest rate and inflation shifts remain key to affordability.
The Bottom Line
Inflation is steady, but still above the Fed’s goal.
Jobless claims are falling, but rehiring is slow.
Existing home sales are flat, but momentum is building.
New home sales are surging, though the supply of ready-to-move-in homes is tight.
GDP growth is stronger than expected, but future Fed decisions will shape what’s next.
For buyers and homeowners, now is the time to pay attention. With rates easing and sales momentum building, the market is shifting—and preparation is key.
The Mortgage Gurus are here to help. Whether you’re buying your first home, upgrading, or refinancing, our team can guide you through the numbers and secure the best financing for your goals.
