Key Takeaways
Home sales nationally fell in July — existing home sales dropped 1.7% to a seasonally adjusted annual rate of 4.06 million (WSJ).
Inflation cooled slightly — the annual rate dipped to 3.4% in July, and core inflation held at a modest 0.2% monthly increase (WSJ).
Non-bank mortgage lenders are showing cracks — UWM needed a $2B capital infusion after an interest-rate hedge went wrong, and FHA delinquency rates are climbing (WSJ).
National Housing Market: Summer Slowdown
According to the National Association of Realtors, existing home sales fell 1.7% in July to a seasonally adjusted annual rate of 4.06 million — below economist expectations. The culprit? Mortgage rates.
The 30-year fixed-rate mortgage averaged 6.69% last week, up from 6.43% at the start of July (per Freddie Mac). The Iran conflict continues to drive energy costs and inflation, which keeps mortgage rates elevated.
The national median home price rose 2% year over year to $434,100 — the second-highest median price on record. Prices are still climbing even as sales slow, which means the market remains competitive for buyers who do move forward.
The silver lining: Despite the month-over-month dip, home sales were actually up 0.7% from a year ago. Some buyers are done waiting — they're accepting today's rates and moving forward with their lives.
Inflation Update: A Slightly Better Story
The July CPI report brought some welcome news:
Annual inflation: 3.4% (down from 3.5% in June)
Core inflation (ex-food & energy): +0.2% month-over-month — modest and encouraging
Gasoline prices fell 2.9% from June (though still up ~25% year over year due to the Iran conflict)
Shelter costs rose modestly; hotel rates actually declined
What does this mean for rates? The Fed may feel less urgency to raise rates in September. Interest rate futures showed traders see roughly a 60% chance the Fed holds steady at its next meeting. That’s good news for anyone watching rates.
A Warning Sign in the Mortgage Industry
This one deserves attention. United Wholesale Mortgage (UWM), one of the largest non-bank mortgage lenders in the country, required a $2 billion private capital infusion after an interest-rate hedge went sideways.
More concerning: 21.5% of UWM’s FHA mortgages originated over the last two years fell seriously delinquent within a year — up from ~11% in 2022-2023. And UWM isn’t alone. Twelve other lenders have even higher one-year serious delinquency rates.
What does this mean for buyers?
This is a reminder that financial health matters now more than ever. Lenders are watching debt-to-income ratios closely.
At Mortgage Craft, when we pull credit to check qualification before issuing a prequalification letter, we’re seeing more delinquencies on student loans, car loans, and credit cards affecting borrowers’ ability to qualify.
Buyers: stay current on your bills. It’s the single most important thing you can do to protect your ability to get a mortgage.
What does this mean for realtors and financial advisors?
Not all lenders are created equal. Working with a financially sound, relationship-driven lender matters — especially in a volatile market.
If your clients are asking about lender stability, we’re happy to have that conversation.
Market News
What’s Happening
Interest rates experienced heightened volatility over the past week as heavy government debt concerns and rising oil prices briefly pushed long-term Treasury yields to multi-year highs. Despite the bond market sell-off, benchmark 30-year mortgage rates edged slightly lower to average 6.65%. Meanwhile, newly released Federal Reserve meeting minutes signaled that ongoing inflation risks could leave the door open for additional rate hikes later this year.