Mortgage rates are slightly lower this month.

Down about 0.125% from 5 weeks ago.

August 1st, 2025

Conventional

6.625%

Rates were

~6.75%

end of June

FHA/USDA

6.125%

Rates were

~6.125%

end of June

VA

5.99%

Rates were

~5.99%

end of June

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What’s Happening?

All news below is color-coded as “good“, “bad“, or “neutral” for mortgage rates.

•Federal Reserve is even more on track to cut rates on 9/17 (good for rates): Markets are now predicting a 90% chance that the Fed cuts rates on September 17th. Mainly fueled by the weak July jobs numbers report today. More details below!

•Inflation Report (bad for rates): The June CPI (Consumer Price Index) report came in a few weeks ago at 2.7% year-over-year. This breaks the 2.4% trend we had seen for most of 2025. This report reduced confidence in a September Fed rate cut but the weak jobs report restored confidence.

•Jobs Report (good for rates): The July BLS Labor Report released today signaled a weaker-than-expected labor market with big revisions for May and June.

New jobs in July came in much lower than expected at 73k new jobs; 100k were expected.
More importantly, the previous two months were over-reported and are now revised down by 258,000 jobs. This flies in the face of the “better-than-expected” reports we got in May and June which should have actually been worse-than-expected.
Trump fired the bureau of Labor Statistics commissioner today after this report was released.
Unemployment stayed at 4.2%.

My Predictions

Rates continue to slowly drop. Markets are now pricing in a 90% probability that the Fed will cut rates on September 17th!

I’ll say it again for those in the back, mortgage rates will likely NOT fall on September 17th. That rate cut is already priced in.

However, if the Fed cuts rates AND signals (or outright says) they’ll keep cutting, then we might see mortgage rates keep falling. We have 1 more month of jobs and inflation data before that next Fed meeting, so we’ll have a pretty good idea of what’s next after that (hopeful) cut.