Housing Market Update | Week of May 6th

The first full week of 2025 is a busy one for the housing market. It’s jobs week, which means we will get a different piece of labor data starting with the Job Openings and Labor Turnover Survey (JOLTS) tomorrow and rounding out the week with the pivotal Bureau of Labor Statistics (BLS) report. As always, if the estimated figures come in below expectations, we could see positive news for mortgage rates. Last Week's Mortgage Rate Recap Rates Were Steady It was a relatively quiet week last week as the markets closed early on New Year’s Eve and remained closed on New Year’s Day. When they reopened on Thursday, bonds began to inch slightly higher after lower-than-expected weekly jobless claims data showed that the labor market has remained resilient. Overall, rates remained in a similar range as the markets await this week’s labor reports. This Week's Mortgage Rate Forecast Rates Could Be Volatile We’re in for a busy week full of pivotal housing market data this week. The Fed has maintained that the labor market must break for it to ramp up cuts to the Fed funds rate, and the 4 major labor reports released daily between Tuesday and Friday will set the tone for the early part of the year. You can find more information about each report below: Tuesday - Job Openings and Labor Turnover Survey (JOLTS): This report shares monthly and annual estimates of job openings, hires, and separations for the nation. The markets expect this figure to remain unchanged at 7.7 million. Wednesday - ADP Employment Report: This report provides an independent view of the private-sector labor market based on the aggregated and anonymized payroll. The primary figure outlines job creation which is estimated at 130 million this month. Thursday - Initial Jobless Claims: A weekly report outlining the number of individuals who have filed for unemployment for the first time. Last week's report showed 211,000 initial claims filed—a significant drop from the forecast of 225,000. Friday - Bureau of Labor Statistics Jobs Report: This report outlines job creation, unemployment rate, and hourly wages throughout the country. The job creation forecast expects 155,000 jobs created and December's unemployment rate came in at 4.2%. As always, the reported figures in each report will need to come in lower than expectations for rates to drop. Feel free to reach out to me throughout the week for updates as these reports roll in! Finally, we have our annual Fed rotation with four new Fed presidents taking over voting responsibilities. One of the four rotating in—Chicago Fed President, Austan Goolsbee—is notoriously in favor of several rate cuts. We will hear from a few Fed presidents throughout the week; the labor data this week will be a primary focus in those speeches. Reach out to a UMortgage Loan Originator to help answer any housing-related questions you may have!

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.