How Jobs, Inflation, and the MBS Maze Juggle Mortgage Rates—and What Denver Is Saying for the Back Half of 2025

Late July brought a jolt to our economy with only 73,000 new jobs added, with May and June slashed by nearly 250,000 after revisions were made to those numbers. The labor market went from “steady as she goes” to “wait, what?” overnight. With that info, investors shifted gears, betting on a Fed rate cut in September. As bond yields slide, pushing mortgage rates down toward that psychological 6 percent mark, investors and homebuyers are bracing for the resulting interest rate changes.

If the jobs data holds weak and inflation continues to cool, mortgage rates could flirt with or dip under the 6 percent mark. Housing economists suggest the Fed may wait for more clarity before easing, but a September or November cut is now firmly on the table which is a breath of fresh air for us all. NAR’s chief economist sees a falling trend toward the low 6 percent zone by year-end if both inflation and wage pressures soften.

On the local front in Denver, the vibe is one of controlled caution. Realtor groups have reported inventory rising steadily for the entirety of 2025 with that number increasing as the year goes on. Buyers are taking their time and homes that are well priced and show-ready are still moving fast. In South Metro Denver, median sales hover near $605,000, and many homes are selling in under three weeks on average. Listings are up, but demand remains refined, but not frantic.

Rismedia adds that inflation still hovers around 2.4 percent annually with shelter costs leading the increase. That means the Fed may stay cautious on cutting rates. The consumer price rise, combined with sluggish jobs data, is likely to hold rates steady through the summer before investors clear the path for cuts this fall. Come on, Jerome!

But, there is more. Rismedia also pointed out a surprising twist when a strong jobs report pushed mortgage rates up for a week. Rates ticked up to about 6.72 percent before dropping again. It’s a reminder that positive surprises can quickly swing markets the other direction. For buyers, it is imperative that you have everything ready to go for the dips!

Houzeo adds a national perspective: elevated rates near 7 percent are putting pressure on buyers, and inventory is stabilizing. Days on market across the U.S. have stretched to about 56 days. In that environment, buyers gain negotiation power and sellers face more pressure to price attractively. While not just in the Denver Metro, those trends perfectly reflect what we are seeing here: more listings, longer market times, and shifting leverage towards buyers.

Here in neighborhoods like Berkeley, Ruby Hill, and Park Hill, sellers are beginning to adjust to this new tempo. More sellers are offering credits or paying down points to entice hesitant buyers. In areas where homes were getting snapped up in one weekend, open houses are back on the calendar. That’s not a bad thing. It means the market is balancing out, giving both sides a little more room to breathe and make smart decisions.

If everything lines up with continued labor softness, easing inflation, declining Treasury yields, and narrowing mortgage-backed securities spreads—buyers with patience and good positioning could see favorable rates before the end of the year. But if the labor market rebounds or inflation surprises on the upside, rates could stay range bound, leaving affordability still high. The one benefit to buying when rates are higher is that you get a good deal on a home and are a prime candidate to refi when they come down again and not be a part of the rat race driving prices up again.

Here’s the bottom line for Denver this summer and beyond. The jobs report got people’s attention, giving room for optimism on mortgage rates. Local listings are finally opening back up, but buyers are assessing their moves very carefully. Homes that are ready and well-priced are still selling quicker. The Fed remains data-driven and inflation remains stubborn, at least in housing, and MBS spreads are gradually shrinking.

The potential for rates below 6 percent is real by fall. That could bring cautious buyers back into the market. Until then, both buyers and sellers here in the metro should watch national data headlines and keep an eye on local listings. Knowing what is happening could mean stepping in at the right moment—or holding out just a bit longer

Thinking of buying or selling in Denver this year? Don’t sit on the sidelines waiting for perfect conditions. The market is shifting in real time, and the best opportunities are often the ones that don’t make headlines. Whether you want to time your purchase with a rate drop or position your listing to stand out in a crowded market, let’s talk strategy. I’ll give you the honest truth, local insight, and a clear plan forward—no pressure, just perspective.

Reach out today and let’s make your next move a smart one.
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