This Week’s Interest-Rate Pulse & Housing Outlook (Aug 23, 2025)

Mortgage rates: The average 30-year fixed rate is holding around 6.58%, matching the lowest level since last fall. Rates have drifted down over the summer, helping purchase activity compared with 2024. Freddie Mac

What the Fed just signaled: In Friday’s Jackson Hole speech, Fed Chair Jerome Powell said rates may need to be cut soon—likely dependent on upcoming jobs and inflation data. Markets are now pricing high odds of a September cut, but the Fed is emphasizing a careful, data-driven approach. Reuters+1

Where policy stands today: The Fed has kept its benchmark rate steady at 4.25%–4.50% since December; the July meeting minutes reaffirmed that stance. Any cut would be the first of this cycle and could nudge mortgage rates lower, though lenders typically move in anticipation. ReutersFederal Reserve

Inflation checkpoint: July CPI rose 0.2% month-over-month and 2.7% year-over-year; “core” (excluding food/energy) is 3.1%—progress, but still above the Fed’s goal. The Fed’s preferred gauge (core PCE) was 2.8% YoY in June; July PCE lands next week. Bureau of Labor StatisticsBureau of Economic Analysis

Housing data snapshot (national):

• Existing-home sales ticked up 2.0% in July to a 4.01M pace. Median price: $422,400 (up 0.2% YoY). Inventory improved to 4.6 months. ReutersNational Association of REALTORS®

• New construction: July housing starts rose to 1.43M (SAAR), with single-family at 939k—a modest lift that helps inventory. Census.gov

• Mortgage applications: Down 1.4% week-over-week in mid-August, showing shoppers are still rate-sensitive. MBA

What This Means for You (Temecula & French Valley)

Buyers

• If you’ve been waiting for rates to budge, momentum is finally tilting your way. Consider a pre-approval refresh and ask your lender about float-down options so you can capture a dip if a Fed cut arrives.

• Inventory is improving, but still tight in popular neighborhoods—clean, confident offers remain key.

Sellers

• Buyer demand tends to perk up when rate cuts hit headlines. Use this window: price precisely, prep thoroughly, and highlight payment-easing incentives (e.g., closing cost credits or temporary buydowns) where it makes sense.

Bottom Line

• Rates are stable-to-slightly-easing, inflation is gliding lower, and housing data is edging in a healthier direction. A September Fed cut could add a bit more tailwind—but expect moderate moves, not a return to pandemic-era lows.