Mortgage rates climbed for a second straight week. Freddie Mac's July 16 survey showed the 30-year fixed averaging 6.55%, up from 6.49%, while the 15-year jumped to 5.93% from 5.82%. The frustrating part for buyers is that the week's inflation news was actually good. The problem, once again, is oil.
National Snapshot
The June Consumer Price Index, released Tuesday, was the best inflation report in a long while. Headline CPI fell 0.4% for the month, the largest monthly decline since April 2020, and the annual rate dropped to 3.5% from 4.2% in May. Core inflation, which strips out food and energy, was flat for the month and 2.6% over the year. Nearly all of the improvement came from gasoline, which fell 9.7% in June as oil retreated during the truce.
Unfortunately that truce is over. The U.S. reinstated its naval blockade on July 14, Iran has been targeting shipping it deems noncompliant, and Brent crude was trading around $88 a barrel this morning, up from about $78 a week ago and $72 at the start of the month. Mortgage News Daily reported lenders raising rates midday today as bond markets sold off on the fuel-price surge. The June CPI report, in other words, may already be stale.
Builders Break Ground
Housing starts surged 19% in June to a 1.427 million annual pace, according to the Census Bureau, the strongest reading in months and 3.5% above June 2025. Completions also rose to 1.392 million. Permits, which point to future activity, slipped 3% to 1.367 million, so builders are finishing what they started but being cautious about new commitments while rates are unsettled.
On the resale side, NAR's pending home sales index fell 5.4% in June to 72.5, its lowest level since January and the first decline in five months. NAR's chief economist pointed to the highest mortgage rates in nearly a year combined with record-high prices as the drag, especially for first-time buyers. Freddie Mac's Sam Khater made a similar point this week, noting that purchase demand has weakened but inventory continues to rise, so the backdrop for buyers is slowly improving.
What This Means for Central Utah
The construction data is worth a closer look here at home. New building continues in and around Richfield, with the city working through annexations and updated residential zoning standards this year to accommodate more housing. More new inventory is good for buyers, and it is a competitive factor sellers of existing homes should keep in mind when setting a price.
For buyers, rising inventory nationally and locally means more choice and more negotiating room than a year ago, even if rates are not cooperating. A 6.55% rate on a typical Sevier County purchase is still far more manageable than the same rate on a Wasatch Front price tag, and USDA zero-down loans remain available for eligible buyers in Monroe, Salina, Manti, Nephi, and most of our rural communities. If gas prices keep climbing, the value of living close to work in a small town only grows.
For sellers, the pending sales drop is a signal to be realistic. Buyers who are still in the market are serious, but they are comparing carefully, and homes that need work or are priced above recent comparable sales are taking longer. A pre-listing walkthrough with our team can help identify the inexpensive fixes that make a home stand out in late summer.
We will keep watching the Gulf and the bond market. In the meantime, if you have questions about mortgage rates, home buying, or home selling in Central Utah, our team is just a call away.