Market Recap - Week of July 21 through July 25, 2025
- Gordon Achtermann, CFP®, CSRIC®, MBA
- Jul 28
- 3 min read
Dear Friends,
Most weeks, I take a look at the past week and write about what’s happening in the market, along with key economic indicators and a chart of the week that takes a deeper dive into something you might not see elsewhere. Here we go…
Market Recap - Week of July 21 - July 25, 2025
The S&P 500 index rose 1.5% this week to another closing record in a broad advance led by the health care sector.
The index ended Friday's session at 6,388.64, its highest closing level ever. That marks the benchmark's fifth consecutive session closing at a record high. The S&P 500 also recorded a new intraday high on Friday at 6,395.82 and is now up 3% for the month and 8.6% year-to-date.
The US announced trade deals with Japan and the Philippines this week. The US also has "a 50-50 chance of making a deal with the EU," President Donald Trump said Friday, ahead of a meeting on Sunday with European Commission President Ursula von der Leyen.
A number of stocks were also boosted by better-than-expected quarterly results.
All of the S&P 500's sectors rose. (see sector returns chart)
Last Week’s Economic Reports
The largest surprise was in durable goods orders, which fell 9.3% from the previous month.
S&P 500 Sector and Stylebox Returns
Thought of the week:
Homeownership remains a distant dream for many Americans, with a lack of affordable housing boxing many consumers out of the market. Some argue that the recent rise in mortgage rates is largely to blame. However, the affordability issue doesn’t stem from the elevated mortgage rates of today but from the low mortgage rates of the last 20 years and the resulting rise in home prices.
While elevated compared to the last decade, mortgage rates today are not outrageously high. At 6.74%, current 30-year fixed-rate mortgage rates are lower than they have been 60% of the time since 1971. At this rate, 31% of the median household's annual pre-tax income would go toward mortgage payments. This is up from 19% in 1971 but down from over 54% in 1981. Instead, higher home prices and, consequently, higher required down payments, are the bigger issue. In 1971, a 20% down payment on a single-family home consumed 57% of the median household’s annual income, and around 80% of the '90s. However, excessive demand spurred by low interest rates following the burst of the dot-com bubble and the Great Financial Crisis, along with sluggish building activity, pushed home prices significantly higher. As a result, a 20% down payment on a single-family home now represents a whopping 100% of annual household income.
Lower interest rates could only address part of the housing affordability crisis, at least in the short run. While lower rates would mean smaller monthly mortgage payments for consumers, they might also lead to higher housing prices, making down payments even more difficult to afford. We don’t expect the Fed to cut rates next week, but even if it opts to ease policy in the months ahead, an immediate bounce in the housing market is unlikely.
Source: JP Morgan (edited)
Up Next
Economic data will include Q2 gross domestic product, the June personal consumption expenditures index, and July employment data.
Want more? You can always find our latest Monthly Market Update webinar here:
All the Best,
Gordon Achtermann, CFP®
703-573-7325
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