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CNET
4 days 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
Wall Street Journal
29-05-2025
- Business
- Wall Street Journal
Pending Home Sales Slump as Mortgage Prices Weigh
The number of homes going under contract in the U.S. fell sharply in April, as high mortgage prices continue to hamper the market, according to a monthly index. Here are the main takeaways from the National Association of Realtors' report released Thursday:
CNN
22-05-2025
- Business
- CNN
Mortgage rates climb to highest level in more than three months amid bond market unrest
Mortgage rates are inching back toward 7%, highlighting the ongoing strain on US home buyers. The average rate on a standard, 30-year fixed mortgage was 6.86% in the week ending May 22, the highest level since mid-February, according to data released Thursday from Freddie Mac. Growing concern about the national debt impacted home borrowing rates this week. Mortgage rates track the benchmark 10-year Treasury yield, which climbed higher as bonds sold off after US federal debt was downgraded from a perfect rating by Moody's Ratings on Friday. Yields continued rising into the week as Wall Street investors began to fret about how much a potential tax bill pushed by the Trump administration could add to the country's debt load. Elevated borrowing rates, coupled with still-climbing home prices, have already stalled spring's traditionally busy home buying season: Sales of previously owned homes dropped by 0.5% last month on a seasonally adjusted basis, according to data released Thursday by the National Association of Realtors. That's the slowest rate of growth since April 2009, NAR said. Despite a slowdown in sales, national home prices aren't falling. The median existing-home sales price rose 1.8% from April 2024 to $414,000, NAR said. That is an all-time high for the month of April and the 22nd consecutive month of year-over-year price increases, the group said. The spring home buying season was further disrupted last month by economic uncertainty fueled by President Donald Trump's on-again, off-again tariff policies. About one in every seven home-purchase agreements fell through last month, according to data released by Redfin on Thursday. Still, this time last year, the typical 30-year mortgage was higher, at 6.94%. That should improve affordability for home shoppers, said Kara Ng, a senior economist at Zillow. There are also more options on the market for prospective home buyers: There were 1.2 million homes for sale in April, nearly 20% more than a year ago, according to Zillow data. 'If household uncertainty around jobs, investment portfolios and budgets eases, then home sales could be poised for a rebound in the months ahead,' Ng said in a statement. 'However, the affordability advantage could diminish if mortgage rates continue to rise.' CNN's Elisabeth Buchwald contributed reporting.
Reuters
22-05-2025
- Business
- Reuters
US existing home sales unexpectedly fall in April
WASHINGTON, May 22 (Reuters) - U.S. existing home sales unexpectedly fell in April despite a temporary drop in mortgage rates and increased supply, and could remain lackluster this year amid rising economic uncertainty. Home sales slipped 0.5% last month to a seasonally adjusted annual rate of 4.00 million units, the National Association of Realtors said on Thursday. Economists polled by Reuters had forecast home resales would rise to a rate of 4.10 million units. Sales last month were the slowest for April since 2009, signaling a weak start to the spring selling season. They declined 2.0% on a year-over-year basis in April. "Home sales have been at 75% of normal or pre-pandemic activity for the past three years," said Lawrence Yun, the NAR's chief economist. Existing home sales are counted at the closing of a contract. Sales last month likely reflected contracts signed in February and March, when the average rate on the popular 30-year fixed-rate mortgage bounced around in the lower end of its 6.09%-6.73%, data from mortgage finance agency Freddie March showed. The rate has since risen, averaging 6.81% last week. Mortgage rates have increased in tandem with the yield on the benchmark 10-year U.S. Treasury note amid President Donald Trump's aggressive trade policy and concerns about the nation's deteriorating fiscal outlook after Moody's Investors Service cut its sovereign credit rating from the top "Aaa" level. With sales being weak, the inventory of existing homes increased 9.0% to 1.45 million units in April. Supply soared 20.8% from a year ago. An oversupply of new homes on the market could pull buyers away from previously owned ones. Builders are cutting prices and offering incentives to attract customers. "At the macro level, we are still in a mild seller's market," Yun said. "But with the highest inventory levels in nearly five years, consumers are in a better situation to negotiate for better deals." The median existing home price increased 1.8% from a year earlier to $414,000 in April, the highest on record for the month. Prices increased in the Northeast and Midwest, but declined in the South and West. At April's sales pace, it would take 4.4 months to exhaust the current inventory of existing homes, up from 3.5 months a year ago. A four-to-seven-month supply is viewed as a healthy balance between supply and demand. Properties typically stayed on the market for 29 days last month compared to 26 days a year ago. First-time buyers accounted for 34% of sales, edging up from 33% a year ago. Economists and realtors say a 40% share is needed for a robust housing market. All-cash sales constituted 25% of transactions, down from 28% a year ago. Distressed sales, including foreclosures, made up 2% of transactions, unchanged from a year ago.
The Independent
22-05-2025
- Business
- The Independent
April home sales slow with high mortgage rates, prices, putting chill into spring buying season
Sales of previously occupied U.S. homes fell in April, as elevated mortgage rates and rising prices discouraged prospective home buyers during what's traditionally the busiest time of the year for the housing market. Existing home sales dropped 0.5% last month from March to a seasonally adjusted annual rate of 4 million units, the National Association of Realtors said Thursday. Sales fell 2% compared with April last year. The latest home sales fell slightly short of the 4.10 million pace economists were expecting, according to FactSet. Home prices increased on an annual basis for the 22nd consecutive month, although at a slower rate. The national median sales price rose 1.8% in April from a year earlier to $414,000, an all-time high for the month of April. There were 1.45 million unsold homes at the end of last month, a 9% increase from March, and 20.8% higher than April last year, NAR said. That translates to a 4.4-month supply at the current sales pace, up from a 3.5-month pace at the end of April last year. Traditionally, a 5- to 6-month supply is considered a balanced market between buyers and sellers.
