Inflation Cooling, Inventory Peak & No Quick Rate Cuts Yet

Looming inflation data may rock interest‑rate‑cut forecasts

Read the full story → [TheStreet: Looming inflation data may rock interest rate cut forecasts]

1. Summary & Highlights
   • TheStreet reports that upcoming inflation readings (CPI, PCE) could upend expectations for imminent Federal Reserve rate cuts .
   • Sticky inflation would prompt investors and the Fed to delay any easing in interest rates.
2. Supporting Data & Context
   • Prior PCE and CPI releases have influenced Fed decisions. Stronger-than-expected inflation may push back cuts into late 2025 .
3. Expert Insight / Market Implications
   • Economists emphasize that without a clear deceleration in inflation, the Fed will maintain its cautious stance through at least September .
   • This would keep mortgage rates elevated for longer.

Loan Officer Takeaway:
Prepare clients for extended high mortgage rates. Emphasize strategy—locking rates or rate buydowns—over hoping for near‑term relief.

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US housing market: buyers frozen despite record $700B inventory

Read the full story → [Business Insider: US housing market buying trends and inventory]

1. Summary & Highlights
   • The U.S. housing market is stagnant, despite a record $700 billion worth of unsold homes listed—marked the highest-ever inventory value .
   • Around 44% of listings have lingered on the market for over 60 days—the most since 2020 .
2. Supporting Data & Context
   • Large inventory hasn’t translated into sales; buyer demand remains subdued due to macroeconomic uncertainty .
   • Analysts note the repercussions of homeowner “rate‑lock inertia,” where existing rate-holders aren’t motivated to sell.
3. Expert Insight / Market Implications
   • With both high rates and now-high inventory, select markets are shifting to a buyer’s advantage .
   • Sellers are slow to adjust prices, but buyer leverage is increasing regionally.

Loan Officer Takeaway:
Leverage the high inventory to support buyer negotiations. Educate clients on affordability merits. Encourage sellers to set realistic expectations.

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Consumer inflation concerns eased in May

Read the full story → [Scotsman Guide: Consumer inflation concerns eased in May]

1. Summary & Highlights
   • Fed’s New York Survey of Consumer Expectations shows inflation fears have cooled in May:
     • 1‑year expectations: ↓ 40 bps to 3.2%
     • 3‑year expectations: ↓ to 3.0%
     • 5‑year expectations: ↓ to 2.6%
   • Job-loss anxiety dipped from 15.3% to 14.8%. Year‑ahead income growth forecast rose slightly to 2.7% .
2. Supporting Data & Context
   • Confidence has bolstered across the West and South, with milder home‑price growth expectations (now around 3%) .
   • Trade tensions eased (U.S.-China tariff rollback), contributing to sentiment improvements .
3. Expert Insight / Market Implications
   • While inflation remains above the Fed’s 2% goal, easing expectations give the Fed room to pause rate hikes .
   • This may help stabilize mortgage rates, though significant cuts are unlikely.

Loan Officer Takeaway:
Share decreased inflation sentiment with clients as a confidence booster. Reinforce that while rates aren’t falling fast, the worst inflation fears may be behind us.

Loan Officer’s Perspective

🛠 Actionable Takeaways

1. Strategic Lock & Buydown Planning
   • Given delayed rate cuts, proactively offer rate buydown options to clients.
   • Help borrowers decide between locking now or using float-down options cautiously when inflation data releases.
2. Buyer Negotiation Advantage
   • Emphasize available inventory and negotiate more favorable terms.
   • Position buyers to take advantage of a softening sellers’ market in targeted regions.
3. Confidence Messaging
   • Use improved consumer inflation sentiment to instill stronger borrower confidence and urgency.
   • Frame housing discussions around affordability tools now rather than waiting for rate cuts.
4. Partner with Builders
   • Initiate outreach to homebuilders about coordinating preapprovals with current rate strategies.
   • Discuss incentives and lock/buydown campaigns that could align with cooling inflation and market stabilization.