Author: Eric BernsteinPublished:
As predicted in last week's newsletter, mortgage rates continued their slide down on a light news week. It's a bit too soon to call, but it ~almost~ seems like we've past peak mortgage rates for 2024.
IF the inflation data coming in this week shows that inflation is once again heading lower, I expect interest rates to continue to fall lower and we can ALL breathe a sigh of relief.
Average rate for a 30-year fixed rate conventional loan fell to to 7.04% (down from 7.08%).Make sure you're signed up for our weekly Friday rate texts. It could make a HUGE difference in your homebuying decision.
The Federal Reserve Still Needs More Data
8 Federal Reserve Presidents spoke over the last week, and the message was a familiar one. Expect to see no policy changes until inflation is firmly heading to 2%.
Minneapolis Fed President Kashkari summed it up best - “If inflation starts to tick back down or we saw some marked weakening in the labor market then that might cause us to cut back on interest rates.”
Jobless Claims FINALLY Come in Higher
Weekly initial jobless claims finally seem to be coming in higher. In fact, they were the highest reported level since August 2023. Continuing claims, which run a week behind, increased to 1.78 million, up 17,000 from the previous week.
We NEED a softer labor market for lower interest rates, and higher initial and continuing jobless claims are big part of proving a softer labor market.
Remember, job gains for April reported on May 3rd and came in at the lowest level in 6 months. That, paired with higher initial jobless claims reporting, is painting a much better (and more realistic) picture of the job market today.
Home Prices Increase Across 93% of Metro Areas in Q1 2024
According to a NAR study, Single-family existing-home sales prices rose in 93% of measured metro areas – 205 of 221 – in the first quarter, up from 86% in the prior quarter.
More and more studies are confirming that the US housing market is experience broad price increases. You may be asking why are prices continuing to increase when interest rates are so high?! The answer.... supply!
"Astonishingly, greater than 90% of the country's metro areas experienced home price growth despite facing the highest mortgage rates in two decades," said NAR Chief Economist Lawrence Yun. "In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand."
Expect interest rates to be volatile this week with inflation news coming out. Good news will have rates falling fast and bad news could send rates much higher.
IF the inflation data coming in this week shows that inflation is once again heading lower, I expect interest rates to continue to fall lower and we can ALL breathe a sigh of relief.
Average rate for a 30-year fixed rate conventional loan fell to to 7.04% (down from 7.08%).Make sure you're signed up for our weekly Friday rate texts. It could make a HUGE difference in your homebuying decision.
The Federal Reserve Still Needs More Data
8 Federal Reserve Presidents spoke over the last week, and the message was a familiar one. Expect to see no policy changes until inflation is firmly heading to 2%.
Minneapolis Fed President Kashkari summed it up best - “If inflation starts to tick back down or we saw some marked weakening in the labor market then that might cause us to cut back on interest rates.”
Jobless Claims FINALLY Come in Higher
Weekly initial jobless claims finally seem to be coming in higher. In fact, they were the highest reported level since August 2023. Continuing claims, which run a week behind, increased to 1.78 million, up 17,000 from the previous week.
We NEED a softer labor market for lower interest rates, and higher initial and continuing jobless claims are big part of proving a softer labor market.
Remember, job gains for April reported on May 3rd and came in at the lowest level in 6 months. That, paired with higher initial jobless claims reporting, is painting a much better (and more realistic) picture of the job market today.
Home Prices Increase Across 93% of Metro Areas in Q1 2024
According to a NAR study, Single-family existing-home sales prices rose in 93% of measured metro areas – 205 of 221 – in the first quarter, up from 86% in the prior quarter.
More and more studies are confirming that the US housing market is experience broad price increases. You may be asking why are prices continuing to increase when interest rates are so high?! The answer.... supply!
"Astonishingly, greater than 90% of the country's metro areas experienced home price growth despite facing the highest mortgage rates in two decades," said NAR Chief Economist Lawrence Yun. "In the current market, rising prices are the direct result of insufficient housing supply not meeting the full demand."
Expect interest rates to be volatile this week with inflation news coming out. Good news will have rates falling fast and bad news could send rates much higher.
Key reporting dates this week:
Mon, 5/13: Fed Committee Members on panel
Tues, 5/14: Producer price index, Core PPI
Wed, 5/15: Consumer price index, Core CPI, U.S. retail sales, Home builder confidence index
Thurs, 5/16: Housing starts, Building permits, Import price index
Fri, 5/17: U.S. leading economic indicators
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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.