Housing Market Update | Week of May 6th

Last week answered a lot of questions that we had about the economy but posed a handful of new questions about the economic impact that Trump’s second term will have on housing affordability. The Federal Reserve also cut the federal funds rate by 0.25%, though their roadmap for future cuts is uncertain. We should get some clarity as Fed presidents speak with the media throughout the week. Overall, the market should be more stable moving forward. Last Week's Mortgage Rate Recap Rates Rose Slightly It was a busy week last week for the housing market with the direct impact of the election and the November Fed meeting. Rates rose on Wednesday as investors pulled their funds from the bond market and reinvested in stocks, causing bond yields to increase and mortgage rates to follow. With the uncertainty of the election behind us, we could see the bond market stabilize and hopefully see mortgage rates start to trickle lower. This Week's Mortgage Rate Forecast Rates Should Be Steady Looking ahead to this week, we should see more rate stability. Multiple Fed presidents are scheduled to offer some insights into their monetary policy moving forward. We also have an upcoming retail sales report that will provide more data into the trajectory of inflation and could potentially impact the bond market. Overall, we should anticipate a few weeks of market stability as we digest fresh data. We’re quickly approaching the end of the year, and the sooner we start preparing, the better equipped we’ll be to capitalize on what’s sure to be a busy year for the housing market. Next Tuesday, November 19th, we’re hosting an exclusive webinar—Planning for Success in 2025—to help us set goals and develop new winning habits to achieve those goals next year. Register here to learn more and save your spot!

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.