Weekly rates little changed
The biggest movers for mortgage rates this week were jobs and the Fed. The Bureau of Labor Statistics employment report, released May 2, showed the labor market was more resilient than expected amidst a period of peak policy uncertainty in April. With the unemployment rate holding steady, the Fed has the gift of time to see how government policies impact the economy before adjusting rates. Mortgage rates rose a little then fell a little but the net was little changed compared to last week.
Impact on the housing market
For a buyer, for-sale affordability has marginally improved. Mortgage rates are down from a year ago, and given the more modest pace of home value growth, the mortgage payment on a typical home is down 1.3% from April 2024. The number of options available to buyers has continued to grow, with housing inventory up nearly 20% year-over-year.
The home shopping season is underway, and newly pending activity has slowed compared to last year, despite this slight improvement in affordability. Peak policy uncertainty in April likely played a role in buyers waiting. However, for a buyer who is ready to buy, now represents an opportunity.
