Issue 160 - Hello and Happy Tuesday,

Rates Take the Elevator Up and the Stairs Down

If your buyers are jittery about rates this week, send them this. The best way I have ever heard it put: rates take the elevator up and the stairs down. They spike fast when there is bad news, then come down slow and steady when things calm, one step at a time. Right now things are calming, and rates are easing down those steps in the right direction.

The job market is cooling, but in the slow, healthy way the Fed has been waiting for. Almost nobody is getting laid off. New claims for unemployment benefits actually fell last week, down to 215,000, so companies are holding tight to the people they have. But the folks who do lose a job are taking longer to land the next one. The number still collecting benefits week after week climbed to 1.82 million, and a lot of them are piecing together gig and freelance work that never shows up cleanly in the official count.

Low layoffs, slower rehiring. That is the gentle cooling that could finally give the Fed room to cut later this year. And do not mistake cooling for weak. The economy grew at 2.1% to start the year, revised up from the first read. The engine is just running a little cooler than it was.

Now here is why this week matters. Thursday morning we get the big monthly jobs report, a day early because the market is closed Friday for the July 4 holiday. That number is the next step on the staircase. A softer report keeps rates walking down. A hot one could call the elevator back. Tell your nervous buyers to watch Thursday, not the noise before it.

Personal Note:

We took the family out to Cassini Ranch camping on the Russian River last week. Had a blast. Great weather and a relatively quiet campground as we hit the lull after the Juneteenth 3-day weekend and before July 4th craziness.

TLDR (Too Long Didn't Read) Summary

• ↔️ RATES - Taking the stairs down. Slow, steady steps, with Thursday's jobs report the next one.

• 🏠 TECHNICALS - New home sales stalled, but finished homes are scarce.

INTEREST RATES
Rates 📢 June 30th, 2026

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⏱️ Rates in 60 Seconds

📊 Let's be straight. Rates have barely budged in two weeks. The 10-year Treasury, the benchmark that pulls mortgage rates along with it, ticked down slightly, but that small move has not reached the rate sheet yet. We are in a holding pattern.

🛢️ Here is the quiet good news. We got a small drop in bonds right after the ceasefire was signed, and they have leaned gently in the right direction since. Oil has been one of the biggest things pushing prices up all year. As oil falls, that inflation fear cools, and mortgage rates tend to follow bonds lower. The bond market is warming to that idea. The rate sheet just hasn't caught up.

⚠️ Now the honest part. The Federal Reserve, the group that sets the country's short-term interest rate, has turned more cautious under its new Chair. The market is no longer betting on cuts this year. That caution is a big reason rates are stuck in place instead of falling.

🔑 Realtor Insight: The bond market is inching the right way, but nothing has moved at the closing table yet. Until the Fed gets comfortable, this slow grind is the story. Anyone promising a big drop around the corner is reading a script the market already threw out.

📅 What to watch this week:

• 🧾 Tuesday: Home price reports and job openings data

• 💼 Thursday: The big monthly jobs report

The jobs report is the headline act. A soft number could finally give bonds room to push that lean into a real move. A hot one keeps us stuck. This week, the data does the talking.

TECHNICALS
Cooling Demand, Bare Shelves

New home sales just posted one of their weakest readings in years. At the very same time, the shelves of move-in-ready homes are nearly empty. Two forces pulling in opposite directions, and together they explain why home values keep holding up.

Here is what each side is telling you.

Force One: Demand Cooled

Buyers pulled back in May, and the numbers show it.

• 📉 New home sales fell 7.3% to an annual pace of 580,000, the second-lowest in nearly four years

• 📅 Sales were down 6.8% from a year ago, with the West dropping almost 27%

• 🏦 This report tracks signed contracts, so it captures buyers shopping in May when rates were still high

Force Two: The Shelves Are Bare

Here is the part that does not make the headlines. There are not many finished homes to actually buy.

• 📋 Of the 496,000 new homes listed for sale, only 118,000 are finished and ready to move into

• 🔨 The rest are either under construction or have not broken ground yet

• 🏠 A buyer who needs to move now is fishing in a very small pond

Why the Squeeze Matters

When demand softens, you would expect prices to give. But when the supply of finished homes is this thin, the two forces cancel out and values hold. The buyer waiting on a price crash that scarce inventory will not allow is the same buyer who keeps renting while the long-term owner quietly builds equity. That is the case for getting off the fence, and it is worth making to every buyer sitting on their hands.

👀 Watch this: Home price data lands Tuesday from Case-Shiller and the FHFA. If prices keep holding while sales slip, that is your proof that tight finished supply is doing the heavy lifting. Pair that with Thursday's jobs report and you have a clean read on where both home values and rates are heading into the back half of the year.