Today is the only day of the week with any economic reports that are relevant to bond market movement. The results are in, and bonds aren’t thrilled.  Jobless Claims and the Philly Fed headline helped initially.  Yields moved back to unchanged levels after some overnight weakness, but the higher inflation component in Philly Fed was already making for second thoughts before the 9:45am S&P PMI data added fuel to the unfriendly reversal. In addition to Manufacturing PMI surging higher, the bigger story is the reported tariff-driven price increases: “Tariffs were reported as the key driver of further cost increases in August. Companies reported the steepest rise in input prices since May and the second-largest increase since January 2023. The manufacturing cost rise was especially large, being the second-steepest since August 2022, the service sector increase was the second-highest since June 2023.” Bonds moved to their weakest levels of the morning after that data.

After sliding back in June, existing-home sales picked up in July. The latest update, released August 21, shows a modest rebound. Sales rose 2.0% to a seasonally adjusted annual rate of 4.01 million are now 0.8% higher than a year ago. As has been and continues to be the case, zooming out on the same chart puts things in the most accurate perspective for the home resale market. Sales levels have hovered near 75% of pre-pandemic norms for three years now. NAR’s Chief Economist Lawrence Yun noted that slightly better affordability and stronger wage growth are giving sales a lift, with buyers also benefiting from more choices in the market. He added that many areas are seeing near-flat price growth, with some regions experiencing outright price declines. Even so, homeowners remain in a strong position, with a cumulative 49% increase in typical home values since mid-2019. Distressed sales remain at historic lows, and inventory has climbed to its highest level since May 2020, offering buyers their best negotiating position in years. Regional Breakdown (Sales and Prices, July 2025)

Region
Sales (annual rate)
MoM Change
Median Price
YoY Change

Northeast
500k
+8.7%
$509,300
+0.8%

Midwest
940k
-1.1%
$333,800
+3.9%

South
1.805m
+2.2%
$367,400
-0.6%

West
720k
+1.4%
$620,700
-1.4%

In a world (like this one) where mortgage rates are dictated by bond market movement and where bonds take cues from certain economic reports, weeks like this one can be frustrating or boring.  Until today, there haven’t been any actionable economic reports to inspire a bond market reaction. Unfortunately, today’s data was relatively unfriendly for rates, primarily due to inflation implications in two separate reports (Philly Fed Index and S&P PMIs). Bonds also care about comments from Fed speakers and there were headwinds on that front as well with the Fed’s Beth Hammack saying the data don’t currently support a rate cut at the September meeting. On a positive note, the damage to the bond market was minimal in the bigger picture. Thus, the impact on average mortgage rates was also minimal. While it’s true that today’s rates are the highest in nearly 3 weeks and 0.09% higher than the recent lows, it’s also true that, apart from those 3 weeks, these are still the lowest rates since October 2024 and 0.13% lower than July 31st. [thirtyyearmortgagerates]

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For the 11th straight business day, mortgage rates are very close to the levels from the end of the previous day.  Over the past week, however, most of these small day-to-day movements have been microscopically higher.  Today’s is no exception. The net effect is that the average top tier 30yr fixed rate is up from 6.53% last Wednesday to 6.61% today.  Even that is a fairly minor move in the bigger picture, but it would certainly make for a weaker rate quote if Wednesdays happened to be your mortgage rate shopping days.   To put the overall change in specific, relatable terms, the average borrower would have to pay 0.4% in points to get the same rate quoted last Wednesday. This equates to $400 for every $100k borrowed.  Today’s modestly higher rates were in place before the afternoon release of the minutes from the most recent Fed meeting (3 weeks ago). The minutes didn’t offer any major new revelations beyond those already seen in recent weeks from individual Fed speeches. 

Almost No Reaction to Fed Minutes

As expected, today’s Fed Minutes (a more detailed account of the meeting that took place 3 weeks ago) had very little impact on the bond market. Markets honed in on one newswire in particular which noted the Fed saw inflation risks outweighing employment risks. This, of course, is because the data had yet to more forcefully suggest employment risk at the time (2 days before the downbeat jobs reports). It’s arguably more important that many Fed members view tariff inflation risks as a process that could take many more months to unfold. That leaves us in the same position as before: waiting for labor market data to really deteriorate before expecting any major additional rate relief. This could happen in as little as 2 weeks, but it depends on the jobs report. As for Fed rate cuts, September is still priced in, and December is just as likely as it was this morning despite some volatility in Fed Funds Futures mid-day.

Market Movement Recap

10:14 AM Minimal change overnight. MBS down 1 tick (.03) and 10yr down half a bp at 4.299

12:15 PM Slightly stronger.  MBS up 2 ticks (.06) and 10yr down 2.6bps at 4.28

02:03 PM Very slight negative reaction to Fed minutes offsetting very slight positive reaction to 20yr bond auction. 10yr still down 1.8bps at 4.287.  MBS up 2 ticks (.06).

02:55 PM Just a hair weaker now with 10yr down 1.1bps at 4.294 and MBS unchanged on the day.