Looming inflation data may rock interest‑rate‑cut forecasts
Read the full story → [TheStreet: Looming inflation data may rock interest rate cut forecasts]
- 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.
- Supporting Data & Context
- Prior PCE and CPI releases have influenced Fed decisions. Stronger-than-expected inflation may push back cuts into late 2025 .
- 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.
US housing market: buyers frozen despite record $700B inventory
Read the full story → [Business Insider: US housing market buying trends and inventory]
- 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 .
- 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.
- 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.
Consumer inflation concerns eased in May
Read the full story → [Scotsman Guide: Consumer inflation concerns eased in May]
- 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% .
- Fed’s New York Survey of Consumer Expectations shows inflation fears have cooled in May:
- 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 .
- 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
- 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.
- Buyer Negotiation Advantage
- Emphasize available inventory and negotiate more favorable terms.
- Position buyers to take advantage of a softening sellers’ market in targeted regions.
- 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.
- 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.
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Frank Garay is a nationally recognized mortgage industry leader, co-founder of The National Real Estate Post and the Loan Officer Breakfast Club. Named to the Inman 100 list of the most influential in real estate and featured on Fox News, Frank now shares timely mortgage and real estate insights through LOBC In The News to help industry professionals stay ahead.