This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.
Market Commentary:
Weekly Market Update — June 6th to June 12th
This past week, interest rates saw a slight decrease following a better-than-expected inflation report released Wednesday. The latest Consumer Price Index (CPI) showed inflation ticking up just 0.1%, with no immediate impact from recent tariff developments. While this is positive news for consumers, it also signals that the Federal Reserve is likely to hold off on any potential rate cuts until September.
For mortgage rates, it remains a waiting game. Without significant economic shifts, rates continue to hover in a relatively narrow range, waiting for stronger catalysts to move meaningfully in either direction.
Should You Wait to Buy?
The question many buyers are asking: "Should I wait to purchase a home until mortgage rates drop?" The short answer is no.
Mortgage rates are just one component of affordability. Home prices, driven by supply and demand, often react quickly to changes in interest rates. If rates do decline, buyer activity will surge, further driving up home prices. In the current market, demand continues to outpace supply, particularly in the first-time homebuyer segment. This tight inventory means that home prices remain elevated, and waiting for rates to drop may simply result in paying a higher price for the same property.
Bottom Line:
For buyers who find the right home at the right price, locking in a purchase now may prove to be a smarter long-term decision than waiting for a perfect rate environment that may never come.
Fed Watch: Target rate (in bps) possibilities, according to the CMEGroup (as of 06/12/2025 – 12:00PM EST):
Market Review: Optimal Blue’s Production Metrics:
Real Estate Investor Survey: Among single-family real estate investors, 65% say the most frustrating part of the buying process is finding deals that cash flow—that share is even higher among landlords based in the West (78%). Resiclub
House Price Appreciation by State and Metro Area: First Quarter 2025
Poor Performance
CY2025 looks to grow meekly for many reasons. First, fiscal policy is contractionary primarily due to required repayment of student loans, but also the likely removal of green energy tax credits. Second, tariffs are increasing uncertainty which reduces capex. Third, declining immigration will reduce employment and thus GDP growth. Lastly, monetary policy is also contractionary with rates too high. Collectively, these impacts probably slice one percentage point off GDP growth. – Elliot Eisenberg, Economist
News You Can Use:
· CEO recession expectations decline from April scare, survey says
· U.S. inflation rises 0.1% in May from prior month, less than expected
· Is it smart to buy a home right now? The U.S. housing market is a ‘mixed bag,’ broker says
· Housing market predictions for the rest of 2025
*Communication is intended for Industry Professionals only and not intended for Consumer Distribution
Interest rate and annual percentage rate (APR) are based on current market conditions as of 06/12/2025, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Prosperity Home Mortgage, LLC. Not available in all states. Rate is as of 06/12/2025 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac’s economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac’s business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.
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