Good news! Mortgage rates are holding steady, as they have been over the past few months. This week’s average rate dipped slightly by .01 percent for a 30-year fixed. Inflation cooled more than expected in May. The headline Consumer Price Index clocked in at just 2.5 percent year-over-year, its lowest reading in four years. Even the more closely watched core CPI held steady when economists anticipated a slight bump.
This positive economic news certainly pleases the Federal Reserve, which happens to be meeting this week. They aim to keep prices stable, and moderating inflation sets the stage for potential rate cuts later this year. While a rate cut isn’t likely now, their comments on inflation will be worth watching. I’ll keep you posted on any market shifts.
On the trade front, encouraging talks between the US and China focus on easing tensions around tariffs and export limits on tech and manufacturing goods. Progress here could stabilize supply chains, helping keep interest rates from spiking. Additionally, the Treasury recently auctioned a hefty batch of 10-year notes. Strong buying demand for these bonds helps keep our national debt funded without putting upward pressure on interest rates.
The housing market is undeniably shifting, giving buyers a bit of breathing room. Home sales ticked up 3.5 percent in May. Inventory hit a post-2020 high of 1.3 million listings, nearly 20 percent more than last year. Sellers are also cutting prices on a record 26 percent of homes nationwide. These factors mean less frantic competition for homebuyers. Homes spend a median of 17 days on the market now, up four days from last year.
Even with these changes, affordability remains a big deal for many. The rent-versus-buy dynamic has significantly changed; renting a starter home now often costs less per month than buying one. Six years ago, buying was much cheaper.
This highlights a crucial point: be sure to reach out to me and ask for help shopping around for your mortgage. This is my zone of genius! A recent analysis found borrowers save an average of $80,024 over the life of a 30-year mortgage simply by comparing offers. That translates to about $222 back in your pocket each month. This potential savings has actually grown over the past year. The average gap between the lowest and highest annual percentage rates nationally is nearly a full percentage point. Strong credit always helps, but even with good credit, not all lenders offer the same terms. Most borrowers only consider one or two lenders, leaving money on the table.
As for the data, I’m watching for the remainder of the week…we get a look at New Housing Starts and Building Permits, which is predicted to remain flat at a 1.360 million unit rate in May versus 1.361 million in April. Permits expected a touch better at 1.430 million versus 1.412 million in April.
