What happened to mortgage rates this week?
The Freddie Mac 30-year mortgage rate rose 3 basis points to 6.58% this week as the U.S.-Iran conflict escalates again and investors reassess the odds of a Fed rate hike. While last week’s cooler-than-expected CPI brought some optimism, the renewed geopolitical tension is pushing oil prices higher, which would once again add upward pressure on inflation — making a rate cut at July’s FOMC meeting almost certainly off the table.
Driven by the rising energy prices, we may see a higher headline inflation reading in the coming month, but the key metric to watch is “core” CPI, which excludes volatile food and energy prices. If core CPI doesn’t follow the headline number higher, that could offer some relief and potentially keep the Federal Reserve from a rate hike.
What does this mean for the housing market?
As we bid farewell to the most buyer-friendly spring market in recent years, the big question on many minds is whether this momentum can carry into summer.
Heading into summer, spring listings age, buyer urgency fades, and activity slows — a typical seasonal pattern. On top of that, uncertainty from geopolitical tensions is likely to linger through the season. Fortunately, Realtor.com’s latest data shows that economic uncertainty is showing up in rates and sentiment, but not yet in transaction behavior. Pending home sales have risen for seven consecutive months and delistings and contract cancellation rates remain below year-ago levels. Together, these figures point to a market where buyers and sellers are staying engaged and adjusting to get deals done — a marked contrast to last summer, when the market stalled out.
