The mortgage rate outlook continues to shift as markets digest mixed economic signals, Fed commentary, and emerging legislation. In late July, mortgage rates are holding steady in the mid-6% range while experts debate what’s next for housing affordability. Meanwhile, new Senate legislation could reshape underwriting by including digital assets like crypto, and Fannie Mae’s updated forecasts signal a slow but steady rate decline into 2026. Here’s what’s moving the market—and how mortgage professionals and Realtors can stay ahead.
Markets Expected More Dovishness From Powell
Read the full story → Mortgage News Daily
Economic reports released earlier in the day suggested the Fed might adopt a more dovish stance—especially after core inflation metrics were revised downward. However, by the close of trading, the bond market remained relatively flat, with mortgage-backed securities (MBS) showing only modest weakness.
While GDP headlines looked strong, underlying demand data told a more muted story. The market had already priced in some softness, so the day ended with very little movement in rates. Current 30-year fixed rates are hovering around 6.75%, keeping borrowers in a cautious holding pattern.
Although the Fed didn’t surprise markets, Chair Powell’s remarks reinforced a slow, patient approach toward policy change—signaling no immediate relief, but no tightening either. The bond market is now closely watching upcoming inflation releases for the next directional cue.
Loan Officer Insight:
- Use the calm to initiate lock discussions—timing matters in a sideways rate market.
- Prep borrowers for future movement; transparency builds confidence.
Realtor Insight:
- Highlight rate stability with urgency: this window could shift quickly.
- Collaborate with lenders to frame scenarios in real-time for active buyers.
Fannie Mae Predicts Major Mortgage Rate Changes Ahead
Read the full story → TheStreet
Fannie Mae is now projecting the average 30-year fixed mortgage rate to fall to 6.4% by the end of 2025—and even lower into 2026, possibly reaching the 6.0% mark. These changes come alongside a downward revision to their home price forecast, which now sits at 2.8% for 2025 and just 1.1% in 2026.
This suggests that affordability could improve gradually over the next 18 months, especially for move-up buyers and long-term planners. While demand remains suppressed in the short term, sales activity is expected to tick up modestly as buyers reenter the market in anticipation of lower rates.
The report reinforces a key message for both lenders and Realtors: while there’s no rush, preparation is everything. When rates do fall, activity could rebound quickly—especially if inventory remains tight.
Loan Officer Insight:
- Use long-range forecasts in pipeline conversations—encourage clients to plan, not pause.
- Create refi watchlists based on this projected curve.
Realtor Insight:
- Message future affordability to your list—position clients to act sooner rather than wait for perfection.
- Stay engaged with sellers who might benefit from listing before competition increases.
Senate Bill Aims to Revolutionize Lending with Crypto Assets
Read the full story → Scotsman Guide
A new Senate proposal—the 21st Century Mortgage Act—could fundamentally shift how digital assets are treated in mortgage underwriting. If passed, it would require agencies like Fannie Mae and Freddie Mac to factor in unconverted crypto holdings when assessing borrower eligibility.
This would mark a major policy shift, especially for younger borrowers with significant digital investments but less traditional liquidity. Currently, crypto must be converted into fiat currency to count toward asset qualification—often triggering tax consequences or delays.
Though opposition is already forming, the proposal reflects growing political and institutional interest in modernizing lending rules. If adopted, this could reshape asset qualification standards and open the door for more innovative products in the coming years.
Loan Officer Insight:
- Start tracking crypto-holding clients—educate them on evolving guidelines.
- Prepare FAQs and educational tools as awareness builds.
Realtor Insight:
- Use this as a conversation starter with digital-native prospects.
- Partner with lenders to build marketing campaigns around non-traditional asset buyers.
Loan Officer’s Perspective
- Prep clients with clarity around sideways rates and future drops—use Fannie Mae data to guide strategy.
- Create contact lists of crypto-holding clients or prospects for proactive education.
- Use this quiet market to lock pipeline clients and refine your follow-up automation.
Realtor’s Perspective
- Position buyers now while rates are stable—especially those eyeing affordability in the future.
- Use new crypto lending headlines to re-engage digitally savvy leads.
- Encourage sellers to consider listing before buyer competition increases in 2026.
Frank’s Thoughts…
I think the most interesting thing today is the crypto story. If we can count crypto as an asset, that could have an impact on automated underwriting decisions. It might get us an approval where we normally wouldn’t have.
This could be a good question to drop in your social feeds to stir up a conversation. You never know where a conversation around crypto might lead.
Have a great day and I hope to see you on LOBC tomorrow!