Mortgage demand just hit its summer slump.

It was confirmed. Let’s talk about it.

My name’s Evan Kaufman, your loan originator, here to give you an August update. We’re going to go over three major things that we’re seeing in the market right now that are moving interest rates and just plain interesting in real estate.

Number one, we’re going to talk about Fed Chairman Powell and the talk about him potentially being fired by President Trump.

Number two, we’ll talk about the summer low—how it was confirmed. I’ve talked about it in some other videos, but mortgage application data came out showing that applications slowed down in July.

And lastly, we’ll look at Opendoor meme stocks. This one’s interesting, with a little twist on a unique event. If you know about the GameStop meme stocks back in 2020 and 2021, something similar has happened in real estate.

So, let’s start with the first one: Jerome Powell, our Fed chairman, and the idea of him being fired by President Trump.

For the last couple of months, there’s been news insinuating that the president has been pushing Powell to lower interest rates. There have been a lot of public statements and pressure from the White House saying, “Hey, we need to lower interest rates. Look at what’s happening in the market.”

That push isn’t necessarily crazy—economic data has been mixed. Some data has been weaker, but a lot of it has still been relatively strong. That means you could argue for lowering rates, or for keeping them the same, and either way the economy would probably stay on track. Many other countries have already pulled back their Fed funds rates, so the White House is looking at them and saying, “We should follow suit.” Maybe yes, maybe no.

The thing is, U.S. economic data overall has been strong. There have been weak points, but generally strong. So, I understand the push and pull. But more recently, there have even been outright calls for firing Jerome Powell, which is very unusual. It’s not completely unheard of, but it would be extremely rare in modern times for a president to fire the Federal Reserve chairman.

What has that meant for mortgage rates? It’s created uncertainty. And uncertainty tends to raise rates. When investors—those buying U.S. treasuries, which heavily influence the mortgage market—get spooked, they demand a higher yield.

That means big investors, whether foreign or domestic, buying up 10-year Treasury bonds (which lenders like us use to hedge mortgage bets), are saying, “We’re more uncertain about the U.S. economy right now. We need a higher return.” And in turn, that raises mortgage rates.

So even if the Federal Reserve lowered the Fed funds rate, uncertainty could still push mortgage rates higher. That’s what we’re seeing right now. This whole “fire or not fire” discussion around Powell is creating instability, and ironically, instead of lowering rates, it’s pushing them higher.

Number two: the summer lull. Sure enough, in July, we saw some of the largest drops in mortgage applications. I mentioned in a few videos back that we typically see a summer lull where things slow down—usually around the Fourth of July. It’s like the “Christmas” of the mid-year, when people take a break from home shopping. Fewer applications, less activity.

The data that just came out confirms it. Mortgage applications slowed down, and we’re also seeing inventory expand. For example, homebuilders now have nearly 10 months of supply—around 9.8 months according to a recent survey. That’s a lot of inventory compared to just a couple years ago when it was a third of that or less.

So, yes, we’ve hit the summer lull. But that also might mean there are some good deals if you’re still looking to buy.

Lastly, number three: Opendoor meme stocks. If you remember GameStop meme stocks and the “to the moon” craze, where people online—Reddit forums, blogs—pushed GameStop’s stock up just to squeeze Wall Street, something similar just happened in real estate.

Opendoor, which was an “iBuyer” company (they’d buy your home with cash based on an algorithm, then resell it), was almost bankrupt but managed to hang on. Recently, it became the target of meme stock traders. Its stock price shot up dramatically, then quickly crashed back down because the fundamentals of the company hadn’t actually changed.

It’s just a quirky, unexpected event: a real estate company turned meme stock. That’s something we don’t see very often.

Well, that’s our August update. My name’s Evan Kaufman, your loan originator, here to help guide you through. As we head deeper into August, I think we’ll get a better picture of what the last half of the year will look like, and I’ll keep you updated.

Thanks for watching. Take care.