July 28, 2026 – Split Fed

Economic Commentary

The Federal Reserve has new leadership in the form of Chairman Kevin Warsh.  But that does not mean that the direction of this government entity is changing all that much.  Sure, Chairman Warsh brings a new perspective to the Fed. He is intent on changing how the Fed communicates with the markets, the size of the Fed’s balance sheet and even its view on inflation, as reported by CNBC. For example, we can expect less in terms of projections from the Fed in the future and a move towards a smaller balance sheet. He would also like the Fed to embrace changes that AI could bring.

However, amongst all these planned changes, there are still fundamental differences between the thinking of the Fed Governors. The minutes from the last meeting – the first chaired by Warsh – is a prime example of this discordance. There are members of the Fed who would like to raise interest rates now in light of the present elevated level of inflation. There are others who believe that this inflationary period is temporary and we should wait it out by keeping rates level.  And there are some who believe that lower rates are warranted due to slower economic growth which could portend a recession. The result was a stalemate, and the Fed kept rates right where they are at the last meeting.

The Federal Reserve Open Market Committee meets again this week, and the economic situation has not changed all that much. Iran is still vacillating between war and armistice. Inflation is still elevated. Long-term interest rates remain elevated. Yet, the economy does not appear to be slipping into recession territory. Instead, the economy seems to be humming along at a slow but positive pace, being held back by muted hiring but being supported by continued consumer spending. So, what will the Fed do when they meet this week?  Most are betting on another split decision which will result in the Fed keeping rates where they are.  In other words, the more things change, the more they stay the same. Stay tuned for the announcement early Wednesday afternoon.

Weekly Interest Rate Overview

The Markets. Mortgage rates continued to rise in the past week as hostilities in the Middle East intensified. Oil prices continued to react to threats on shipping in the Middle East, fueling the rise in rates. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.58% last week from 6.55% the previous week, with further increases occurring after the survey period. In addition, 15-year loans also increased to 5.96%. A year ago, 30-year fixed rates averaged 6.74%, 0.16% higher than today. Freddie Mac noted that market conditions continue to evolve. Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

Realtor.com report finds investors accounted for 11.3% of home purchases in 2025, as small investors gained market share and institutional buyers continued to retreat. As existing-home sales remained near multi-decade lows in 2025, real estate investors continued buying at a steady pace, according to a new report from Realtor.com. The Realtor.com Investor Report found that investors accounted for 11.3% of all home purchases in 2025, up slightly from 11.0% in 2024. Roughly 534,000 homes were purchased by investors last year, a 0.7% increase from the prior year, even as non-investor home sales fell 2.1%. At the same time, investor selling activity slowed. Investors sold approximately 442,000 homes in 2025, down 1.5% year over year and the lowest level since 2020. The gap between investor purchases and sales widened to roughly 92,000 homes, suggesting investors remain committed to accumulating residential real estate despite elevated rates and affordability challenges. “The investor market has found a new equilibrium,” said Hannah Jones, senior economist at Realtor.com. “With small investors now comprising nearly two-thirds of all investor purchases and large institutional players continuing to pull back, the dynamics shaping competition in entry-level housing are shifting — but that competition hasn’t gone away.”  Mega investors made up just 7.5% of investor purchases by 2025, which is their lowest percentage since 2011. Since then, their purchase volumes have decreased by over 70%. Source: National Mortgage Professional

Nearly three-quarters (74%) of U.S. homeowners would rather be at home than anywhere else, according to a recent Redfin-commissioned survey.  Redfin reported on how Americans feel about their homes and their neighborhoods. Redfin commissioned Ipsos to conduct the survey of 4,000 U.S. residents, including 2,280 homeowners and 1,431 renters. Results in this report are based on a single question which asked respondents to answer how likely they were to agree or disagree with a set of statements about how they relate to their current home and neighborhood. Homeowners were about as likely to agree that their home is a reflection of who they are (74%), and that they feel a sense of belonging in their neighborhood (72%). By contrast, most renters (57%) said their home is just a place to live. Just 35% of homeowners said the same. “For many homeowners, a home is more than a place to sleep and store belongings—it’s a reflection of who they are,” said Redfin Principal Economist Sheharyar Bokhari. “Homeownership can help people put down roots, build relationships and create a space that feels uniquely their own. Those emotional benefits are a big reason why owning a home remains a cornerstone of the American Dream. While affordability remains a challenge, today’s buyer’s market is giving some house hunters more negotiating power. Buyers are increasingly able to secure concessions and include inspection contingencies, helping them make more informed decisions before taking the leap into homeownership.”  Source: Redfin

Meet the real-life Golden Girls. In the much-loved 1980s sitcom the four wisecracking women who share a house in Miami met through an ad on a supermarket bulletin board. Present day in Denver, the housing matchmaker is Sunshine Home Share Colorado, a local nonprofit that Alison Joucovsky, a senior services administrator, founded in 2016 when the problem became urgent. “My phone was ringing off the hook,” she said, recalling anxious pleas from older residents spending most of their Social Security checks on rising rent or facing years-long waiting lists for subsidized senior housing. Home sharing “is a really efficient way to create affordable housing and to support older people who want to age in place,” Ms. Joucovsky said. Carefully vetting both “home providers,” who may be rattling around in family houses now too big and too empty, and “home sharers” seeking reasonable rents, Sunshine facilitated 31 shares last year, a record for the nonprofit.  “The cost of developing and building new housing is astronomical, and so is the length of time it takes,” said Laura Fanucchi, president of the National Shared Housing Resource Center and an administrator with HIP Housing, a home-share organization in San Mateo County, Calif. “Why not make use of existing housing stock?” About 55 organizations around the country offer these services — and demand is growing, driven by housing shortages, rising rents and sales prices that affect both the old and the young. Legislators in several states are working to promote home sharing as an option.  The need is acute. About a third of households headed by someone 65 or older were “cost-burdened” in 2024, according to an analysis by the Harvard Joint Center for Housing Studies. That means they spent more than 30 percent of their income on housing. To help increase their reach, some home-share programs now supplement or replace the traditionally labor-intensive matching process with online platforms. Source: The New York Times