VIDEO: Real Estate Regret
There's one thing I've NEVER heard in almost 25 years of mortgage lending.
Let's dive into factors affecting the mortgage market last week - and why we're keeping a close eye on interest rates.
First up: The latest BLS Jobs Report showed 139,000 jobs created in May - beating expectations. But don't be fooled. Revisions from earlier months have been consistently lower, and the Household Survey revealed a whopping 696,000 job losses. With 625,000 people exiting the labor force, the unemployment rate technically stayed at 4.2%, but that's like saying your coffee is still full after half of it spilled.
Meanwhile, average hourly earnings ticked up 0.4%, putting a bit of inflation pressure on rates, even as the broader economic data suggested a cooling trend. ADP's employment report also painted a weaker picture, with only 37,000 jobs created - way below the expected 115,000 - adding to the slowdown narrative.
On the housing front, home prices continue to climb modestly with year-over-year growth around 2%, according to ICE. That's Intercontinental Exchange - the financial data company - not the other ICE currently making headlines. We'll let the politicians hash that one out.
Mortgage bonds have been on a rollercoaster this week, with technical support levels getting tested and retested like a high school pop quiz. Bonds initially rallied after some weak economic reports but got knocked back after the BLS jobs numbers and wage data spooked the market. Ultimately, interest rates ended the week almost exactly where they started.
Something else we're watching: Bank deregulation. Treasury Secretary Scott Bessant and Vice Chair Michelle Bowman signaled that the Fed might ease some capital requirements on banks holding Treasuries. If banks are allowed to buy more Treasuries, that could boost demand, push prices higher, and help move mortgage rates lower. Stay tuned for developments in July when the Fed hosts a key conference on this topic.
Next week brings the NFIB Small Business Optimism Index, Consumer & Producer Price Index, and Consumer Sentiment. These reports will give us more clues about inflation - and where mortgage interest rates might be headed next.
I'm keeping an eye on it all so you don't have to.
You can win when the market is changing. We can show you how. I’m Emily Caryl Ingram. I lead a team at New American Funding providing home loans throughout the Pacific Northwest. Call, text, or visit emilycaryl.com when you’re ready to get started.
