Housing Market Update | Week of September 9th

! Last week’s influx of labor market data showed that the labor economy is continuing to soften. Economists fully expect to see a rate cut this month, though right now the markets are priced with the expectation of a 25bps cut rather than a 50bps cut. This week gives us some inflation data with the CPI on Wednesday; however, the main driver of mortgage rates will be how the bond market digests last week’s labor data. As you know, every different mortgage type has a different set of requirements, and it can be tricky to stay on top of it all! To help you give your clients the right information in a snap, my team created this Real Estate Agent study guide. This guide has down payment and credit score minimums, as well as the different maximum loan amounts for the top 5 types of purchase loans. Make sure to have this on hand the next time you meet with a client to help them understand their options! Last Week's Mortgage Rate Recap Rates Trickled Lower Three out of last week’s 4 pieces of labor data came in slightly softer than expected, which helped the 10-year yield drop below 3.8% and brought mortgage rates down slightly with it. The three employment reports that showed month-over-month job creation all came in lower than expectations. Most notably, the ADP report showed 99,000 jobs created—the lowest reading in this report since the pandemic. As a result of this employment data, bonds continued to drop, and spreads remained favorable for this drop to continue. This Week's Mortgage Rate Forecast Rates Should Stay Steady The only significant piece of data that we are expecting to see this week is Wednesday’s CPI report. Inflation data doesn’t quite hold as much weight as it used to, but it’s still something that Fed members watch, especially as we reach the end of the year. As things stand, we are getting a 25bps rate cut during the Fed Meeting next week. This rate cut is already reflected in mortgage pricing, so things should remain steady for the next couple of weeks. However, if the Fed pivots and cuts by 50bps, we could see a sharp decline late next week. As I shared earlier, my team created this Real Estate Study Guide to help give you quick access to down payment and credit score minimums, as well as maximum loan amounts for the top 5 types of purchase loans. Feel free to print it out to have on hand with your upcoming client meetings!

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.

Last week’s inflation data came in a little hotter than expected and, combined with slowed GDP growth and low jobless claims, mortgage rates rose slightly last week. With inflation moving in the wrong direction the last three months, there will be a much bigger emphasis on the job market breaking for the Fed to cut rates this year. We have three big pieces of employment data coming this week as well as the Federal Reserve’s 2-day May meeting ending on Wednesday, so expect some movements this week. Next week, May 6th at 11:30am, we are recapping the Federal Reserve meeting during a special edition of our Monday Market Update. Our resident market experts will recap the meeting and review what was said by Fed Chairman, Jerome Powell, to provide a look ahead at what we can expect with the summer housing market. This event will be free to stream live on YouTube, follow this link and subscribe for a notification when we go live! Last Week's Rate Recap - Rates Rose Slightly The Federal Reserve has been trying to slow the rate of inflation since 2022, but last week’s PCE data showed that we are continuing to trend away from their target of 2.7%. Although the PCE report came in as expected, it still sent stocks and mortgage bonds higher and put increased pressure on labor data to get our desired rate cuts this year. This Week's Rate Forecast - Rates Could Be Volatile This week we have two main areas of focus for the housing market and mortgage rates. Tomorrow and Wednesday, the Federal Reserve will hold its May Fed Meeting. Although a rate cut is unfortunately all but off the table, Jerome Powell’s press conference will give us insight into their path forward. We also have multiple labor reports, and, as we mentioned earlier, an increase in unemployment will be key for any future rate cuts. We’ll have the ADP employment report on Wednesday, initial jobless claims on Thursday, and the BLS jobs report on Friday, so expect some volatility in the second half of the week. Once again, our market experts will be offering a full breakdown of the Fed Meeting and how the decisions made and rhetoric released will impact the housing market next Monday at 11:30am ET on YouTube live. This presentation is free to stream and will offer loads of educational insight that will help empower you this purchase season. You can watch this and all our weekly Market Update streams right here on the UMortgage YouTube channel!