Mortgage rates stabilize at elevated levels
Mortgage borrowers get a small respite, as rates edged down to the lowest levels seen in weeks.
Bond yields – and the mortgage rates that tend to follow them – fell as the ADP employment report showed private employers added only 37,000 jobs in May, one third of what was expected by economists. The Bureau of Labor Statistics employment report, released June 6, will give economists another glimpse of how the labor market is faring.
Impact on the Housing Market
Despite elevated mortgage rates, affordability has actually improved since last year. The typical mortgage payment is down 1.7% compared to the previous May. Buyers also currently have access to the largest housing inventory since July 2020.
Economic uncertainty held back sales activity in April. The stock market’s significant volatility during this period may have impacted down payments and made households nervous about the future, leading to buyer hesitation. With the stock market off the lows, some easing in economic uncertainty in May, paired with stabilization in mortgage rates, home buying activity may tentatively recover.
