Author: Eric BernsteinPublished:
Mortgage rates stayed flat on mixed jobs data, but the stock market has been on an absolute tear - the best winning streak in over 20 years! Warren Buffett, when asked about the recent market volatility over the last 30-45 days, Buffett said, "It's really nothing." It's a philosophy that's lost on a lot of investors today. When investing in anything (stocks/real estate/etc.) it's important to zoom out and take a long term view. Worrying about the day to day, leads to undue stress and likely poor decision making.
The average rate on a 30-year fixed rate conventional loan stayed relatively flat at 6.775% - up from 6.75% just the week before.
BUT, a growing number of our clients are becoming more and more interested in Adjustable Rate Mortgages (ARM) - and for good reason! Clients are shaving more than 0.5% off their rate by opting for a 7/1 ARM (which is a 30 year loan where the rate stays fixed for the first 7 years). In this high rate environment where rates are expected to go down in the near term, an ARMs are very attractive. Check out our blog post outlining the difference between Fixed Rates and ARMs - and how mortgage regulation reform post-2008 have made ARMs a great and safe alternative to Fixed Rate loans. It's important to know all your options in this market.
Sign up for our weekly Friday rate texts to stay in the know on where rates are week by week!
JOBS JOBS JOBS
This month's jobs reporting was HIGHLY anticipated. Many want to believe that we are the labor market wouldn't be able to withstand the negative effects of tariffs and government spending cuts under the new administration, but so far, it's been holding up well.
Job openings fell again - as of the end of March, there were 7.19M job openings. Sharply lower than the 7.48M openings (revised from 7.56M) reported in February and well below the market expectation of 7.5M. The Fed wants to see lower job openings as it can be a sign that the labor market is cooling. Job openings haven't been this low since December 2020. Normal Job Openings pre-pandemic ranges from 6.8M - 7.2M. The report also showed that people are quitting twice as fast as they are being hired, and as an aside, I don't recommend quitting your current job without a new job lined up in this economy, especially if you're looking to qualify for a mortgage!
Lower job openings is good for homebuyers because it means the Fed is more likely to cut rates sooner (at least if we didn't have to worry about the inflationary effects of tariffs). Interestingly enough, HR and Recruiting jobs are down 40% and 28% respectively according Aura Intelligence, which translates to companies being less interested in recruiting and maintaining employees right now.
The big surprise came from the Jobs Report last Friday. Nonfarm payrolls increased a seasonally adjusted 177,000 for the month, well above the Dow Jones estimate for 133,000. Interestingly enough (but went with little notice), March nonfarm payrolls were revised sharply lower from the initial 228,000 reported to just 185,000. The unemployment rate held at 4.2% (as expected).
The market cheered the employment report as a major win for the labor market, and rates crept up a bit on the news. Everyone is waiting for a job market that's going to be weaker than expected, but it isn't here now. We'll see how long the labor market can withstand the pressure of high tariffs affecting global trade. There are reports of impending negative effects like Chinese imports dropping 40% year over year, which is bound to affect local job markets if not resolved quickly, but just how much of an effect it will have remains to be seen.
Trade Deals Are Coming?
Maybe even as early as this week, says Trump. “We’re negotiating with many countries, but at the end of this, I’ll set my own deals — because I set the deal, they don’t set the deal,” Trump said aboard Air Force One. “You keep asking the same question: ‘When will you agree?’ It’s up to me, it’s not up to them.”
The market is looking for trade deals to end the panic over tariffs and inflation. While China is still a long way off from a trade deal, countries like Japan, India and South Korea could be imminent. We'll see how this plays out this week.
Rate Cut Predictions
There's a 98% chance the Fed won't cut rates this WEDNESDAY week and that's okay! June 18th still looks like the first time we'll see a rate cut this year. The markets will be very interested to hear what Powell has to say about the Fed's latest outlook on the economy, labor markets and, of course, inflation! He's speaking this Wednesday at 2:30 ET.
Make sure to follow us on Instagram for immediate reactions to all news
The average rate on a 30-year fixed rate conventional loan stayed relatively flat at 6.775% - up from 6.75% just the week before.
BUT, a growing number of our clients are becoming more and more interested in Adjustable Rate Mortgages (ARM) - and for good reason! Clients are shaving more than 0.5% off their rate by opting for a 7/1 ARM (which is a 30 year loan where the rate stays fixed for the first 7 years). In this high rate environment where rates are expected to go down in the near term, an ARMs are very attractive. Check out our blog post outlining the difference between Fixed Rates and ARMs - and how mortgage regulation reform post-2008 have made ARMs a great and safe alternative to Fixed Rate loans. It's important to know all your options in this market.
Sign up for our weekly Friday rate texts to stay in the know on where rates are week by week!
JOBS JOBS JOBS
This month's jobs reporting was HIGHLY anticipated. Many want to believe that we are the labor market wouldn't be able to withstand the negative effects of tariffs and government spending cuts under the new administration, but so far, it's been holding up well.
Job openings fell again - as of the end of March, there were 7.19M job openings. Sharply lower than the 7.48M openings (revised from 7.56M) reported in February and well below the market expectation of 7.5M. The Fed wants to see lower job openings as it can be a sign that the labor market is cooling. Job openings haven't been this low since December 2020. Normal Job Openings pre-pandemic ranges from 6.8M - 7.2M. The report also showed that people are quitting twice as fast as they are being hired, and as an aside, I don't recommend quitting your current job without a new job lined up in this economy, especially if you're looking to qualify for a mortgage!
Lower job openings is good for homebuyers because it means the Fed is more likely to cut rates sooner (at least if we didn't have to worry about the inflationary effects of tariffs). Interestingly enough, HR and Recruiting jobs are down 40% and 28% respectively according Aura Intelligence, which translates to companies being less interested in recruiting and maintaining employees right now.
The big surprise came from the Jobs Report last Friday. Nonfarm payrolls increased a seasonally adjusted 177,000 for the month, well above the Dow Jones estimate for 133,000. Interestingly enough (but went with little notice), March nonfarm payrolls were revised sharply lower from the initial 228,000 reported to just 185,000. The unemployment rate held at 4.2% (as expected).
The market cheered the employment report as a major win for the labor market, and rates crept up a bit on the news. Everyone is waiting for a job market that's going to be weaker than expected, but it isn't here now. We'll see how long the labor market can withstand the pressure of high tariffs affecting global trade. There are reports of impending negative effects like Chinese imports dropping 40% year over year, which is bound to affect local job markets if not resolved quickly, but just how much of an effect it will have remains to be seen.
Trade Deals Are Coming?
Maybe even as early as this week, says Trump. “We’re negotiating with many countries, but at the end of this, I’ll set my own deals — because I set the deal, they don’t set the deal,” Trump said aboard Air Force One. “You keep asking the same question: ‘When will you agree?’ It’s up to me, it’s not up to them.”
The market is looking for trade deals to end the panic over tariffs and inflation. While China is still a long way off from a trade deal, countries like Japan, India and South Korea could be imminent. We'll see how this plays out this week.
Rate Cut Predictions
There's a 98% chance the Fed won't cut rates this WEDNESDAY week and that's okay! June 18th still looks like the first time we'll see a rate cut this year. The markets will be very interested to hear what Powell has to say about the Fed's latest outlook on the economy, labor markets and, of course, inflation! He's speaking this Wednesday at 2:30 ET.
Make sure to follow us on Instagram for immediate reactions to all news
Key reporting dates this week:
Mon, 5/5: S&P final U.S. services PMI
Tues, 5/6: U.S. trade deficit
Wed, 5/7: FOMC meeting, Powell Press Conference, Consumer credit
Thurs, 5/8: Initial jobless claims, U.S. productivity, Wholesale inventories
Fri, 5/9: Fed Presidents speaking
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About the Author:
Eric Bernstein is the President and Co-Founder of LendFriend Mortgage, where he helps homebuyers make smarter, more confident decisions in today’s fast-moving housing market. With over a decade of experience guiding hundreds of clients—from first-time buyers to seasoned investors—Eric brings a mix of market insight, strategy, and personalized service to every mortgage transaction. Each week, Eric breaks down the housing and economic headlines that matter, giving readers a clear, no-fluff view of what’s happening and how it might impact their buying power.