Housing Market Update | Week of May 6th

The 10-year yield finally stabilized last week after back-to-back volatile weeks. The biggest piece of news driving rates last week was a speech given by Fed Chairman Jerome Powell at the Economic Club of Chicago on Wednesday. Powell reinforced that the Fed would need to analyze the true impact of tariffs on inflation and the growing threat of a job-loss recession before opting to cut mortgage rates. The bond market reacted positively to his speech, dropping to 4.2% on Wednesday before bouncing back slightly before the 3-day weekend. This week has more speeches from Fed Presidents scattered between Tuesday and Thursday. Expect to see the bond market react each day depending on what’s said. Last Week's Mortgage Rate Recap Rates Were Relatively Stable Relative to previous weeks, mortgage rates were stable last week thanks to some much-needed stability in the bond market. We saw the bond market drop slightly after Powell’s speech on Wednesday before it returned to the previous level on Thursday ahead of a 3-day weekend for the markets in observance of the Easter holiday. Perhaps the biggest headline was an attack directed at Powell by President Trump, whose administration is reportedly exploring whether it can fire Powell. Powell was appointed by Trump in 2017. Powell’s term is set to end in May 2026. This Week's Mortgage Rate Forecast Rates Could be Volatile This week will feature more speeches from Fed Presidents between Tuesday and Thursday. Given President Trump’s ongoing feud with the Federal Reserve and increased pressure to cut rates, these speeches and what’s said by these Fed Presidents will likely gain a lot of media attention and drive market activity every day. In terms of hard data, we’ll get the March New Home Sales report on Wednesday and consumer sentiment data on Friday. Despite a slight increase in rates, purchase application data remains positive. Year-over-year, purchase applications are up 13%. If rates can drop closer to 6%, expect to see a significant uptick in housing market activity. As always, the market can change drastically every single day. In periods of volatility, it’s more important than ever to make sure you and your Loan Originator partners are aligned to continue to help your buyers make informed decisions and maximize the wealth-building benefits of homeownership. As the week progresses, make sure to stay in touch with your UMortgage Loan Originator for updates throughout the week as things develop.

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.