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:
Interest rates for the week of May 30th to June 6th decreased slightly. "The average mortgage rate decreased this week, which is welcome news to potential homebuyers who also are seeing inventory improve and house price growth slow,” said Sam Khater, Freddie Mac’s Chief Economist.
The Federal Reserve continues to hold steady at 4.25% - 4.50%, its next policy meeting is June 17-18, and investors don't expect any change at that gathering.
President Trump renewed his call for Federal Reserve Chair Jerome Powell to lower interest rates as a new report showed weakness in the job market. Some policymakers are arguing for "looking through" the impact of the duties as temporary, a stance that would leave the door open for cuts. Many on the rate-setting committee, however, believe there is a risk that inflation from tariffs could become more persistent.
Fed Watch: Target rate (in bps) possibilities, according to the CMEGroup (as of 06/05/2025 – 12:00 PM EST):
Market Review: Optimal Blue’s Production Metrics:
U.S. Home Sellers Are Sitting on Nearly $700 Billion Worth of Listings, an All-Time High
Investor Purchases of Condos Fall to Lowest Level in 10 Years, Aside From Start of Pandemic
Hiring Halt
Cracks are beginning to appear in the heretofore strong labor market. Initial jobless claims have been steadily rising since the start of the year, and for the week of 5/24/25 were 240,000, the third highest level since 10/12/24. Much more worryingly, however, are continuing claims. They too have been steadily rising since 1/1/25, and are now at 1.919 million, the highest level since 11/13/21. Few get fired, fewer get hired. – Elliot Eisenberg, Economist
News You Can Use:
· Fannie Mae predicts major mortgage rate changes are coming soon
· Fed ‘Beige Book’ economic report cites declining growth, rising prices and slow hiring
· Mortgage Applications Dip in May amid Refinance Slowdown
· ADP: Private Employment Increased 37,000 in May
· Social Security benefits get reprieve from student loan collections, but paychecks are still at risk
· Here’s where normal people can still buy homes, according to real estate data
· Fed likely on track to lower rates after bumpy period, says Goolsbee
· U.S. Tariffs: Redfin’s Latest Analysis of Housing Market Impacts
*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 06/05/2025, 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 06/05/2025 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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