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Could a July Rate Cut Be on the Table?

In a speech this week, Federal Reserve Governor Christopher Waller signaled that we might see an interest rate cut as early as July. With inflation continuing to cool and unemployment holding steady at 4.2%, Waller says the data points to “good news” for the economy—and potentially, lower rates for buyers.

His remarks echoed recent commentary from President Trump, who also suggested lowering rates now and adjusting them later if needed. This puts renewed pressure on Fed Chair Jerome Powell, who has come under fire for maintaining higher rates—some say worsening the housing supply crunch as a result.

The Fed’s go-to inflation measure, the PCE price index, rose just 2.1% in April, close to the 2% target. Powell has voiced concern that proposed tariffs could reignite inflation, but Waller believes any resulting price hikes would likely be short-lived.

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May Housing Market: Prices Set a Record, Sales Tick Up

Home sales rose 0.8% in May, reaching an annual pace of 4.03 million units, according to the National Association of Realtors. That’s slightly better than expected and was likely fueled by a 20% increase in available housing inventorycompared to last year. Still, year-over-year sales were down 0.7%, and high mortgage rates above 7% in April continued to challenge affordability.

Notably, the median U.S. home price hit a record: $422,800, up 1.3% from last year. Nearly 28% of homes sold above asking price, a clear sign that demand still outweighs supply in many markets. Higher activity was seen in the $750K–$1M range, with a dip in homes over $1M. Cash buyers made up 27% of the market, and first-time buyers accounted for fewer sales.

Homes are staying on the market longer, and regional trends varied: sales rose in the Northeast, Midwest, and South—but fell in the West, where prices remain steepest.

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Mortgage Applications Edge Up as Refinancing Picks Up Steam

For the week ending June 20, 2025, mortgage applications increased by 1.1%, driven by a 3% bump in refinance activity, especially for FHA loans. Purchase applications dipped 0.4%, but both categories are showing strong year-over-year growth: refinances up 29%, and purchases up 12%.

The average purchase loan size dropped to $436,300, the lowest since January. Rates stayed mostly flat, with the 30-year fixed mortgage averaging 6.88%.

Other highlights from the Mortgage Bankers Association:

• Refinance share of applications: 38.4%
• Adjustable-rate mortgage (ARM) share: 6.9%
• FHA loan share: 19.3%
• Average rates:
  • 30-year conforming: 6.88%
  • 30-year jumbo: 6.88%
  • FHA 30-year: 6.59%
  • 15-year fixed: 6.11%
  • 5/1 ARM: 6.16%

Despite global uncertainty and inflation concerns, interest rates have remained within a relatively narrow range heading into July.

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What to Watch Next Week

Here’s a look at upcoming economic reports that could shift the market outlook:

• Monday, June 30: No reports scheduled
• Tuesday, July 1: Construction Spending, Job Openings
• Wednesday, July 2: ADP Employment Report
• Thursday, July 3: Jobless Claims, Employment Rate, Hourly Wage Growth
• Friday, July 4: Markets closed for Independence Day

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Course and Coast Insight: What This Means for Skidaway Island

While these national numbers paint an interesting picture, it’s the Skidaway Island housing market that matters most to our clients. That’s why we’ll be tallying up the local stats and publishing our Skidaway Market Recap at the end of the month. We’ll break down local pricing, inventory trends, days on market, and more.

If you’re thinking of buying or selling on Skidaway Island, let’s talk. Knowing the local numbers—and what’s driving them—gives you a major edge.