💸 Inflation Cools, Sales Chill

Issue 119 - Hello and Happy Tuesday.

We’re back! Unexpected 2-week gap, thank you to all who reached out to see if you had missed the newsletter. You didn't, it was me slacking!

Traveling from CA to MI on one Monday, then Memorial Day the following week, threw quite a wrench into the typically scheduled newsletter time.

Personal Note:
Besides what is going on with rates, I know you all want to see what we’ve been up to over the last few weeks!

We had a wedding of a family friend in Bodega Bay, wonderful venue, but chilly for sure.

A big chunk of the GTG team flew out to our annual pilgrimage to Pontiac, MI to visit UWM. Great people, great time, and ran into a few old friends I had not seen in a few years. It was excellent to see them as well!

Jamie flew out with us, and she and I stayed over in Detroit for an extra 3-4 days playing tourist. She was in charge of picture taking; I haven't had a chance to get pics from her, so you get to enjoy my mediocre photo skills of pizza and a bar that was totally Star Wars themed. You’re welcome.

TLDR (Too Long Didn’t Read) Summary

• ↔️ RATES - No major movements, some slight bumps.

• 📊 TECHNICALS - Close but no cigar on inflation.

INTEREST RATES
Rates 📢 June 3rd, 2025

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

Mortgage Rates: Flat to Slightly Higher

Over the past 3 weeks, rates have held steady or ticked up slightly. Today, FHA and high-balance loans bumped up about 0.125%, but most products remain near recent highs.
Trend: Modestly higher since mid-May, despite today's dip
Why: Trade tensions, inflation concerns, and cautious Fed tone

🔮 What Could Move Rates Next?

• 📊 This Week: Jobs data (ADP & BLS) — strong = higher rates

• 🔥 Next Week: CPI/PPI — any upside surprise means more pressure

• 🧊 Bottom Line: No rate relief unless the labor market breaks or inflation cools fast

TECHNICALS
Inflation Down, But Buyers Still Playing Hard to Get

The Fed’s favorite inflation gauge cooled down again in April, showing continued progress toward their 2% goal. But it’s not all smooth sailing: pending home sales dropped hard despite growing inventory, and job seekers are still struggling to land new gigs. Let’s break it down. 👇

📊 Inflation: Cooling, But Slowly

• Headline PCE (the Fed’s go-to inflation tracker) rose just 0.1% month-over-month, and now sits at 2.1% year-over-year.

• Core PCE (excluding food and energy) dropped to 2.5%, inching closer to that coveted 2% target.

• 🏠 Shelter costs are still showing as elevated on paper, but real-time rent data (Zillow, Apartment List, CoreLogic) says otherwise. Expect these numbers to keep softening once the lag catches up.

• Why it matters: Progress may slow through the rest of 2025 due to last year’s already-low inflation comps. The real momentum might kick in early 2026.

  

🏠 Home Prices: Still Rising, Just Slower

• Case-Shiller Index shows home prices rose 0.8% in March (unadjusted) and 3.4% annually.

• Urban markets (10- and 20-city composites) are outperforming national trends, growing 4.8% and 4.1% year-over-year.

• FHFA Index (tracking homes with conventional financing) shows a similar 3.7% annual growth.

• 💡 Agent Insight: Limited inventory continues to support home values. Even at 4% growth, a $600K home adds $24K in equity in just 12 months.

  

📉 Pending Sales: Ouch.

• Pending home sales dropped 6.3% in April after a strong March.

• ❗All four regions saw declines.

• NAR's Lawrence Yun: "More inventory, but still not enough activity."

• 🛠️ Agent Tip: Inventory's up slightly, which means buyers have room to negotiate. Time to sharpen those offer strategies!

  

🔍 This Week to Watch

Here comes Jobs Week:

• Tues: JOLTS (Job Openings)

• Wed: ADP Private Payrolls

• Thurs: Weekly Jobless Claims

• Fri: 🔥 Big One — Nonfarm Payrolls + Unemployment Rate

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