Housing Market Update | Week of April 28th

Last week, we saw mortgage rates and the 10-year yield come down slightly and show signs of greater stability following two weeks of volatility. The 10-year dropped from 4.4% to 4.2% as the week progressed because of a spike in initial jobless claims and verbalized concerns about a recession by certain Fed Presidents. This week has a surplus of major economic data related to inflation and the labor market. Recently, economic headlines have had more influence on mortgage rates than the actual data. However, some economists and Fed Presidents believe that we could start to see this data worsen, which could heighten worries about the potential for a recession. Last Week's Mortgage Rate Recap Rates Dropped Slightly Mortgage rates dropped slightly last week as the 10-year yield slid from 4.43% to 4.24% in the second half of the week. Hard economic data has been secondary to trade war headlines concerning mortgage rate movements this month. However, Cleveland Fed President Beth Hammack expressed concern that negative sentiment about the U.S. economy could start showing in the hard data as soon as this week. This Week's Mortgage Rate Forecast Rates Could be Volatile After being primarily influenced by economic headlines in April, we have a ton of data coming throughout the week that will be pivotal to mortgage rates in this summer market. See the bullets below for a brief overview of what’s to come this week: Tuesday: Case Shiller Home Price Index; FHFA Home Price Index; Job Openings and Labor Turnover Survey (JOLTS) Wednesday: Q1 2025 GDP; Personal Consumption Expenditures (PCE); ADP Employment Report Thursday: Weekly Initial Jobless Claims Friday: BLS Jobs Report Of the reports listed above, the biggest ones to keep an eye on will be the PCE report & ADP employment report on Wednesday and the BLS jobs report on Friday. The PCE report is the Fed’s favorite inflation index; the report will cover March, so it won’t show the direct impact of tariffs on inflation. However, it could show that inflation continued to drop towards the Fed’s target of 2% before tariffs were enforced. The labor reports will be pivotal. Both the ADP employment report and the BLS jobs report will share labor figures for April, which have been impacted by tariffs. Initial jobless claims rose to 222,000 last week, suggesting that widespread layoffs are starting to show in newly released data. If we start to see the labor market deteriorate, this could speed up the Fed’s decision to act and cut the Fed Funds Rate. In this market, any headline could make the bond market and mortgage rates shift on a near-daily basis. As the week progresses, make sure to stay in touch with your UMortgage Loan Originator for updates after certain reports are released or headlines are published.

Last week was a wild one for mortgage rates. Although the Federal Reserve announced that they would not be cutting the Federal Funds rate in their May meeting, they did announce that they are tapering their balance sheet reduction. This, combined with weak labor data sprinkled at the end of the week, saw mortgage rates drop at the end of the week. Last Week's Rate Recap: Rates Dropped Slightly Last week, the Federal Reserve held its May meeting. While they decided against cutting rates, Jerome Powell, Fed Chairman, held a dovish stance on the possibility of rate cuts in the future. Last week’s labor reports also showed a softening in the jobs market which caused rates to drop quickly at the end of the week. While it’s still unlikely that we see a rate cut in the Fed’s next meeting, a weakened labor market will be the key to seeing rates drop as the year goes on. This Week's Rate Forecast: Rates Should Stay Steady After the flurry of data and insight from last week’s jobs reports and the Federal Reserve meeting, we have a quieter week ahead without much data for the market to digest. Following a steep drop to the 10-year yield at the end of the week, market analysts will have a careful approach to instill some stability throughout the week. Overall, we should expect to see some steadiness throughout the week. If you want a more comprehensive overview of the market’s reaction to the Federal Reserve meeting and labor data last week, check out a replay of today’s Special-Edition Monday Market Update. Our two hosts offered plenty of insight behind these rate movements and some tactical advice to help you use these pieces of market data to better serve our homebuyers.