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CNET
3 hours ago
- Business
- CNET
Mortgage Rate Predictions for the Week of June 2-8, 2025
Mortgage rates can change daily and even hourly. Tharon Green/CNET Mortgage rates aren't budging, and neither is the housing market, as investors continue to weigh the unknowns of President Trump's economic policies. According to Bankrate, the average rate for a 30-year fixed mortgage crawled past 7% last week, up from around 6.75% a month ago. However, despite an increase in housing inventory, pending home sales plummeted by 6.3% last month, according to the National Association of Realtors. "At this critical stage of the housing market, it is all about mortgage rates," said Lawrence Yun, NAR chief economist, in a statement last Thursday. "Lower mortgage rates are essential to bring homebuyers back into the housing market." Most analysts predict that a meaningful drop in mortgage rates isn't on the horizon. We're likely to see more economic volatility over the coming weeks and months. Overall, prospective homebuyers should expect rates to remain near 6.8% for the remainder of 2025, according to Redfin's forecast. What's impacting mortgage rates right now? Though a temporary reprieve from the most aggressive tariffs has eased some stagflation fears, economists caution that tariff-driven price bumps could derail the Federal Reserve's interest rate cuts. "As long as the tariffs remain high, there will be a worry about persistently high inflation that the Fed cannot ignore," said Chen Zhao, Redfin's head of economic research. Fewer interest rate cuts combined with the administration's budget bill, which is expected to increase government debt deficits significantly, are likely to keep upward pressure on longer-term bond yields, directly impacting the mortgage market. Since the 30-year mortgage rate closely tracks the 10-year Treasury yield, rising bond yields translate to higher rates for home loans. Could the Fed still cut interest rates? While the Fed's actions don't immediately dictate mortgage rates, they indirectly influence how much it costs to borrow money across the economy. Following signs of cooler inflation, the Fed cut interest rates three times in 2024, making borrowing costs slightly less restrictive. However, the Fed has been in a holding pattern since then, waiting to see the long-term implications of the president's policies before it lowers rates again. Economists now predict the Fed will delay interest rate cuts until at least September. "There's way too much uncertainty as to what becomes of the tariffs, inflation and the broader economy," said Keith Gumbinger, vice president at "There may be no cut at all if conditions don't support it." While recent economic data shows some decline in official inflation figures, price growth is expected to go up. As domestic companies pass expensive duties onto consumers in the form of higher retail prices, inflation is likely to escalate again. Gumbinger said mortgage rates have been holding somewhat steady in a high range because there is no clear path ahead for the economy, inflation or Fed policy. Could a recession result in lower mortgage rates? Mortgage rates are likely to stay above 6.5%, and any dips will probably be small and temporary. Rates will move based on incoming economic data and how investors respond to policy shifts. "The situation could change quickly if there are new announcements out of the Trump administration or if global economic conditions weaken," said Lisa Sturtevant, chief economist at Bright MLS. For example, if the unemployment rate climbs significantly due to layoffs, the Fed might consider easing policy to avert a deeper downturn. A recession isn't a foregone conclusion, but it's still a possibility: Jobless claims are on the rise, consumer spending has slowed and economic growth declined in the first quarter of 2025. The prospect of a potential economic downturn is weighing heavy on consumer confidence. Even if the by-product of an economy in freefall is lower mortgage interest rates, buyers who are worried about job security and affording the high cost of living will be hesitant to take on mortgage debt. "When people are anxious, they are less likely to make big decisions, like buying and selling a home," Sturtevant said. What do housing market experts recommend? In today's unaffordable housing market, prospective buyers have multiple reasons to postpone plans for homeownership. High mortgage rates and growing unease about economic instability have kept overall activity low. "Given so many unknowns, it is a good time for caution. But if the market presents a potential homebuyer with a house they love and can afford, there's little reason not to take advantage of the opportunity," said Gumbinger. Homeownership offers the promise of long-term financial stability and generational wealth-building through equity. If you're waiting for mortgage rates to come down before buying, keep in mind that the large-scale economic issues affecting the housing market are beyond your control. Instead, you can focus on the ways to bring down your individual mortgage rate, said Hannah Jones, senior research analyst at For example, shopping around for lenders can save borrowers up to 1.5% on their mortgage rate. Since each lender offers different rates and terms, you can always negotiate a better rate. If you're financially ready to buy, you can always refinance your mortgage down the road. Jones said other strategies for lowering your mortgage rate include improving your credit score, making a larger down payment or choosing a more affordable home. Experts recommend making a homebuying budget and sticking to it. Creating a realistic financial plan can help you decide if you can handle the costs of homeownership and provide you with some guidance for how large your mortgage should be. Watch this: 6 Ways to Reduce Your Mortgage Interest Rate by 1% or More 02:31 More on today's housing market
Yahoo
2 days ago
- Business
- Yahoo
Mortgage rates rise for third straight week, hover near 7%
Mortgage rates increased for the third straight week and continue to hover near the 7% level, mortgage buyer Freddie Mac said Thursday. Freddie Mac's latest Primary Mortgage Market Survey, released Thursday, showed that the average rate on the benchmark 30-year fixed mortgage rose to 6.89% from last week's reading of 6.86%. It marked the highest level since Feb. 6, when the rate on a 30-year mortgage also averaged 6.89%. The average rate on a 30-year loan was 7.03% a year ago. "Aspiring buyers should remember to shop around for the best mortgage rate, as they can potentially save thousands of dollars by getting multiple quotes," said Sam Khater, Freddie Mac's chief economist. When Leaving The House To Your Heirs Backfires The average rate on the 15-year fixed mortgage climbed to 6.03% from last week's reading of 6.01%. One year ago, the rate on the 15-year fixed note averaged 6.36%. Read On The Fox Business App These States Were The Housing Market Mvps, According To Meanwhile, the National Association of Realtors on Thursday said that its Pending Home Sales Index, based on signed contracts, dropped by 6.3% to 71.3 last month. Economists polled by Reuters had forecast contracts, which become sales after a month or two, falling 1%. Pending home sales declined by 2.5% from a year earlier. "At this critical stage of the housing market, it is all about mortgage rates," said NAR chief economist Lawrence Yun. "Despite an increase in housing inventory, we are not seeing higher home sales. Lower mortgage rates are essential to bring home buyers back into the housing market." Reuters contributed to this article source: Mortgage rates rise for third straight week, hover near 7% Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Housing contract activity dropped sharply in April as volatility and high rates reigned
Home contract signings took a nosedive in April as high mortgage rates and tariff uncertainty weighed on prospective buyers. The Pending Home Sales Index fell 6.3% in April from a month earlier to 71.3, according to the National Association of Realtors. Economists had been expecting a more modest 1% decline. A reading of 100 is equal to the level of housing contract activity in 2001. Year over year, pending contracts were down 2.5% nationwide. Contract activity was down month over month in all parts of the country and decreased year over year in all regions except the Midwest, which saw a 2.2% gain. The latest drop in activity comes even as homebuyers have more to choose from in most markets. According to nearly 1 million homes were active on the market in April, up more than 30% from a year earlier. But prices are still near all-time highs, and mortgage rates remain well above 6%, making the market unaffordable for many. Read more: When will mortgage rates go down to 4%? By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy 'At this critical stage of the housing market, it is all about mortgage rates,' NAR chief economist Lawrence Yun said in a statement. 'Despite an increase in housing inventory, we are not seeing higher home sales. Lower mortgage rates are essential to bring homebuyers back into the housing market.' Last month, house hunters contended with particularly volatile mortgage rates and fresh economic uncertainty stemming from President Trump's 'Liberation Day' tariff announcements on April 2. Learn more: Historical mortgage rates — How do they compare to current rates? Investor panic in the aftermath of the tariff announcement sent stocks falling and bond yields and mortgage rates rising. Average 30-year mortgage rates started last month at around 6.64% before rocketing toward 7%. They finished the month at around 6.8% and have hovered there since. Homes usually go under contract a month or two before they're sold, and while not all contracts close, pending home sales are typically an early indicator of housing market activity. Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance. Sign up for the Mind Your Money newsletter Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
US pending home sales fall sharply in April
WASHINGTON (Reuters) -Contracts to buy U.S. previously owned homes fell more than expected in April as rising mortgage rates and economic uncertainty weighed on demand. The National Association of Realtors (NAR) said on Thursday its Pending Home Sales Index, based on signed contracts, dropped 6.3% to 71.3 last month. Economists polled by Reuters had forecast contracts, which become sales after a month or two, falling 1.0%. Pending home sales declined 2.5% from a year earlier. "At this critical stage of the housing market, it is all about mortgage rates," said Lawrence Yun, the NAR's chief economist. The average rate on the popular 30-year fixed-rate mortgage jumped to 6.81% in April from around 6.65% in March, data from mortgage finance agency Freddie Mac showed.
Reuters
4 days ago
- Business
- Reuters
US pending home sales fall sharply in April
WASHINGTON, May 29 (Reuters) - Contracts to buy U.S. previously owned homes fell more than expected in April as rising mortgage rates and economic uncertainty weighed on demand. The National Association of Realtors (NAR) said on Thursday its Pending Home Sales Index, based on signed contracts, dropped 6.3% to 71.3 last month. Economists polled by Reuters had forecast contracts, which become sales after a month or two, falling 1.0%. Pending home sales declined 2.5% from a year earlier. "At this critical stage of the housing market, it is all about mortgage rates," said Lawrence Yun, the NAR's chief economist. The average rate on the popular 30-year fixed-rate mortgage jumped to 6.81% in April from around 6.65% in March, data from mortgage finance agency Freddie Mac showed.
