Issue 157 - Hello and Happy Tuesday,
Fannie Mae's latest Home Price Expectations Survey just dropped. A panel of 150+ economists is forecasting 14% cumulative home price growth over the next five years.

Apply that to a typical $850,000 Sonoma County home, and it works out to roughly $1,900 a month in projected appreciation.

That's $1,900 a month every buyer on the sidelines isn't earning. It's also the framing most renters never hear. The question stops being "rent versus payment" and starts being "what am I not building?"

Personal Note:

Summer is right around the corner. The kids' last day of school is Thursday, and the weather lately is reminding us that Spring is over!

The boys went to their first Giants game last week. Was super fun!

TLDR (Too Long Didn’t Read) Summary

• ↔️ RATES - Holding still.

• 💵 INDUSTRY - River Property in Sonoma County

• 📊 TECHNICALS - Stubborn Bonds

INTEREST RATES
Rates 📢 June 2nd, 2026

Rate data as of morning of publication. Unless noted otherwise, all scenarios are assuming 30 Year-Fixed mortgage, Purchase or R/T Refinance. No origination points charged, 780 FICO score, and 20% down payment. Provided for consumer education only and does not serve as a binding offer to extend lending. Payment period, interest rate, APR, and other terms subject to income, asset, and credit profile qualification. Provided courtesy of GTG Financial, Inc. NMLS 1595076. Equal housing opportunity. www.nmlsconsumeraccess.org

⏱️ Rates in 60 Seconds

📈 Prices went up a bit faster in April. The Fed's favorite inflation number (how fast prices are rising) climbed to 3.3% a year. That's still too high for the Fed's liking. When inflation runs hot, bonds get nervous, and mortgage rates stay stuck near the top of their range.

🏠 Here's the good news for your buyers. A group of more than 150 economists just predicted home prices will grow about 14% over the next five years. On a $500,000 home, that's roughly $70,000 in new equity.

🛠️ New home sales slipped 6.2% in April. Builders blame higher rates and gas prices. But move-in ready homes are still hard to find, which keeps prices firm.

👀 Realtor Insight: Rates aren't moving much right now. Friday's jobs report could change that. In the meantime, the better number for a hesitant buyer is the $70K of equity they could gain over five years. That's the conversation worth having.

📅 What to watch this week:

• Tuesday: Job openings

• Wednesday: Private payroll numbers

• Thursday: Weekly unemployment claims

• Friday: The big jobs report

Friday is the one to watch. A weak report could push rates lower. A strong report keeps them parked right where they are.

INDUSTRY
Sonoma County, River Property

When buyers come up from the Bay Area, they almost always want the river. The retreat. Getting away from city life. That instinct makes total sense.
 
What most of them do not expect is that river area properties are a completely different world when it comes to lending.

TECHNICALS
Inflation Nudges Up, Bonds Hold Their Footing

Mixed week. Hotter annual inflation, softer growth, steady home price forecasts. Through it all, mortgage bonds quietly rebuilt some ground.

Inflation: Cooler Month, Warmer Year

🔹 Headline PCE: +0.4% monthly, 3.8% annual 🔹 Core PCE (the Fed's preferred gauge): +0.2% monthly, 3.3% annual (up from 3.2%)

Softer monthly prints, but annual core ticking higher keeps the Fed cautious and in no rush to cut.

Home Prices: Modest Now, Meaningful Later

🔹 Case-Shiller: +0.7% year over year 🔹 FHFA: +1.7% annual on conventional loans

Fannie Mae and Pulsenomics surveyed 150+ experts and project 14% cumulative growth over the next five years. On a $500,000 home, that's roughly $70,000 in built equity from appreciation alone.

New Home Sales: One Bad Month, Not a Trend

New home sales fell 6.2% in April to a 622,000 annualized pace. But of 489,000 homes listed, only 122,000 are move-in ready. Tight finished supply keeps a floor under prices.

Growth and Jobs

🔹 Q1 GDP revised down to 1.6% 🔹 Initial claims: 215,000 (low) 🔹 Continuing claims: +15,000 to 1.786 million

Few people losing jobs, but those who do are taking longer to find new ones. A cooling labor market in slow motion.

Watch this week: JOLTS Tuesday, ADP Wednesday, claims Thursday, and Friday's jobs report. A soft print pushes bonds through resistance. A hot one sends them back. Also watching the lead-up to Fed Chair Warsh's first FOMC meeting June 16-17.