Author: Eric BernsteinPublished:
Last week was ANOTHER week of little to no change in interest rates. As tariffs continue to loom and inflation concerns pick back up, the economy (and interest rates) aren't sure which way to move.
The average rate on a 30-year fixed rate conventional loan jumped a bit to 6.63% - up from 6.56%!
We've seen a big resurgence in buyers wanting 7-year adjustable rate mortgages instead of 30 year fixed rate mortgages. The rate is about 0.25-5% lower than a 30-year fixed (depending on the borrower) and borrowers want the savings (especially at these home prices) given the expectations for interest rates to drop within the next 7 years.
Sign up for our weekly Friday rate texts to stay in the know on where rates are week by week! It's a must for anyone planning to buy or refinance in 2025!
Pending Home Sales Rebound
Pending home sales, which measures how many homeowners have gone under contract, jumped 2% from last month's numbers (more than the 1% expected increase). Nationwide pending home sales are still down 3.6% year-over-year but... 1) pending home sales isn't a perfect predictor of buyer demand and 2) these are national numbers after all and as I said last week - real estate is hyper local.
Again, in Austin, pending home sales are down 5% year over year, but in Houston, pending home sales are up 1.5% year over year. And, while Austin pending home sales may be down year-over-year, I'd say that our Austin business is busier than it has been in years with buyers trying to get into their dream neighborhood within Austin and either paying over asking or getting outbid.
While 2020-2022 were years where every home in real estate appreciated and sold quickly because of super low rates, 2023-2025 have been years where we go back to basics and it's all about... location, location, location.
Inflation Gives Mixed Signal
Turns out... tariffs may actually be stoking inflation! Every economist might be right on this one as the personal consumption expenditures (PCE) price index showed a 0.4% increase for the month, the biggest monthly gain since January 2024, putting the 12-month inflation rate at 2.8%. Economists surveyed by Dow Jones had been looking for respective numbers of 0.3% and and 2.7%.
The news absolutely wrecked the stock market, which had one of its worst days and looks to continue losses today. The silver lining is when stock markets fall, so do rates. Mortgage rates had a great Friday and are poised to continue going down today.
“It looks like a ‘wait-and-see’ Fed still has more waiting to do,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “Today’s higher-than-expected inflation reading wasn’t exceptionally hot, but it isn’t going to speed up the Fed’s timeline for cutting interest rates, especially given the uncertainty surrounding tariffs.”
"Today's data is only inflaming stagflation fears," said James Knightley, chief international economist at ING. "We are moving in the wrong direction and the concern is that tariffs threaten higher prices, which mean the inflation prints are going to remain hot. This will constrain the Fed's ability to deliver further interest rate cuts."
Rate Cut Predictions
Atlanta Federal Reserve President Raphael Bostic believes we'll see just 1 rate cut this year. Bostic originally believed we'd see 2 cuts this year, like many other members of the Fed, but has since changed his tune. With less progress on inflation and businesses expected to add the cost of coming tariffs to their prices, "the appropriate path for policy is also going to be pushed back," Bostic said in an interview on Bloomberg on March 24th.
While June 18th is still the near certain date for the first rate cut, odds are becoming increasingly likely for a rate cut on May 7th (the next time the Fed meets).
The labor data we see THIS WEEK will have a great impact on what the Fed decides to do during their next meeting. Make sure to follow us on Instagram for immediate reactions to all news. Friday is going to be HUGE.Make sure to follow us on Instagram for immediate reactions to all news
The average rate on a 30-year fixed rate conventional loan jumped a bit to 6.63% - up from 6.56%!
We've seen a big resurgence in buyers wanting 7-year adjustable rate mortgages instead of 30 year fixed rate mortgages. The rate is about 0.25-5% lower than a 30-year fixed (depending on the borrower) and borrowers want the savings (especially at these home prices) given the expectations for interest rates to drop within the next 7 years.
Sign up for our weekly Friday rate texts to stay in the know on where rates are week by week! It's a must for anyone planning to buy or refinance in 2025!
Pending Home Sales Rebound
Pending home sales, which measures how many homeowners have gone under contract, jumped 2% from last month's numbers (more than the 1% expected increase). Nationwide pending home sales are still down 3.6% year-over-year but... 1) pending home sales isn't a perfect predictor of buyer demand and 2) these are national numbers after all and as I said last week - real estate is hyper local.
Again, in Austin, pending home sales are down 5% year over year, but in Houston, pending home sales are up 1.5% year over year. And, while Austin pending home sales may be down year-over-year, I'd say that our Austin business is busier than it has been in years with buyers trying to get into their dream neighborhood within Austin and either paying over asking or getting outbid.
While 2020-2022 were years where every home in real estate appreciated and sold quickly because of super low rates, 2023-2025 have been years where we go back to basics and it's all about... location, location, location.
Inflation Gives Mixed Signal
Turns out... tariffs may actually be stoking inflation! Every economist might be right on this one as the personal consumption expenditures (PCE) price index showed a 0.4% increase for the month, the biggest monthly gain since January 2024, putting the 12-month inflation rate at 2.8%. Economists surveyed by Dow Jones had been looking for respective numbers of 0.3% and and 2.7%.
The news absolutely wrecked the stock market, which had one of its worst days and looks to continue losses today. The silver lining is when stock markets fall, so do rates. Mortgage rates had a great Friday and are poised to continue going down today.
“It looks like a ‘wait-and-see’ Fed still has more waiting to do,” said Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management. “Today’s higher-than-expected inflation reading wasn’t exceptionally hot, but it isn’t going to speed up the Fed’s timeline for cutting interest rates, especially given the uncertainty surrounding tariffs.”
"Today's data is only inflaming stagflation fears," said James Knightley, chief international economist at ING. "We are moving in the wrong direction and the concern is that tariffs threaten higher prices, which mean the inflation prints are going to remain hot. This will constrain the Fed's ability to deliver further interest rate cuts."
Rate Cut Predictions
Atlanta Federal Reserve President Raphael Bostic believes we'll see just 1 rate cut this year. Bostic originally believed we'd see 2 cuts this year, like many other members of the Fed, but has since changed his tune. With less progress on inflation and businesses expected to add the cost of coming tariffs to their prices, "the appropriate path for policy is also going to be pushed back," Bostic said in an interview on Bloomberg on March 24th.
While June 18th is still the near certain date for the first rate cut, odds are becoming increasingly likely for a rate cut on May 7th (the next time the Fed meets).
The labor data we see THIS WEEK will have a great impact on what the Fed decides to do during their next meeting. Make sure to follow us on Instagram for immediate reactions to all news. Friday is going to be HUGE.Make sure to follow us on Instagram for immediate reactions to all news
Key reporting dates this week:
Mon, 3/31: Chicago Business Barometer (PMI)
Tues, 4/1: Richmond Fed President Thomas Barkin speaks, Construction spending, Job openings, Auto sales
Wed, 4/2: ADP employment, Factory orders
Thurs, 4/3: Initial jobless claims, Initial jobless claims. ISM services
Fri, 4/4: U.S. employment report, U.S. unemployment rate, Jerome Powell speaks
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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.