May 30th, 2025 5:10 PM by T. Fanning
Good afternoon! It's hard to believe June is almost here. Enjoy your weekend!
Markets reacted to tariff news last night, so today's headlines confirming tariffs are back on (for now) didn't cause much new movement as traders had already anticipated this. Similarly, today's PCE Price Index, an inflation report that's usually less surprising than the earlier CPI report, didn't significantly stir markets. Traders are more focused on how inflation and tariffs will affect things over the next six months. With major economic news now passed, expect normal month-end trading to drive market activity. The week concluded with improved interest rates.
Next week, expect a few major economic updates. Key reports include the ISM manufacturing index on Monday—this index measures the health of the U.S. manufacturing sector. Also, watch for the May jobs report on Friday. We'll also hear from several Federal Reserve members about their views on the economy and interest rates.
We offer traditional Conventional, FHA, VA, USDA, Jumbo. Some of the other programs we offer include: First-time Homebuyer loans; HomePossible and HomeReady programs; Custom term loans; HomeStyle and FHA 203k renovation financing; Construction financing; Chenoa Fund loans (100% FHA financing); Conventional, FHA and VA 1x Close Construction-Perm loans; 1.50% Down FHA Advantage Program; CHFA Financing; Modular and manufactured home financing; 10% down Jumbo loans; DSCR loans; Bank Statement loans; Asset-based loans; Non-Warrantable Condos; Interest Only loans; Lot loans; Second mortgages (fixed or HELOC) on primary, second and non-owner occupied residences; Reverse mortgages; and more! To see a detailed list of programs, visit our website: www.homeloanmortgageco.com/mortgageprograms
Last Updated: 5/30/25
Friday's bond market has opened in positive territory following mixed economic news. Stocks are showing losses of 18 points in the Dow and 112 points in the Nasdaq during early trading. The bond market is currently up 5/32 (4.40%), which should improve this morning's mortgage rates by approximately .125 of a discount point.
Yesterday's 7-year Treasury Note auction drew a fairly strong demand from investors, particularly international buyers. The benchmarks all pointed to a decent sale, notably better than Wednesday's 5-year Note auction. Bonds had already improved before the 1:00 PM ET results announcement, but extended those gains a bit more after they were posted. This led to some lenders making an intraday improvement in rates early afternoon, while many likely waited for this morning's rates to reflect the change. Either way, the auction did have a positive influence on mortgage pricing.
April's Personal Income and Outlays report at 8:30 AM ET failed to bring any negative surprises, at least in the key portions of the report. The closely watched Personal Consumption Expenditures (PCE) indexes that the Fed relies heavily on as their preferred gauge of inflation rose 0.1% last month, pegging expectations. On an annual basis, the overall reading rose at a 2.1% pace, down from March's 2.3%. April's year-over core PCE fell from March's 2.7% to 2.5%. Both annual readings were slightly softer than forecasts, meaning in the Fed's eyes inflation was weaker than thought. This is good news for bonds and mortgage rates because slowing inflation makes long-term securities, such as mortgage bonds, more attractive to investors.
The other headline numbers to come from the early morning report showed income jumped 0.8% last month, exceeding predictions of up 0.3%. That indicates consumers had more money to spend than expected. However, the spending reading pegged forecasts of a 0.2% increase. It is apparent that even though consumers had more money available to spend, they didn't spend it. We are labeling this part of the report to be neutral to slightly negative for rates.
Closing out this week's calendar was the University of Michigan's revised Index of Consumer Sentiment for May at 10:00 AM ET. They announced a reading of 52.2 that was higher than the preliminary reading of 50.8 from two weeks ago. Analysts were expecting to see 52.0, meaning consumers felt a bit better about their own financial situations than previously thought. Rising confidence usually translates into strong consumer spending that fuels economic growth. Accordingly, this report should also be considered neutral to slightly negative for rates.
Next week doesn't have a large number of economic reports set for release, but most of what is scheduled are considered to be highly important. The week will give us the typical new month reports such as the ISM manufacturing index late Monday morning and May's Employment report Friday morning. In between, there are a couple of moderately important reports. We also will be watching several Fed-member speaking engagements since a few of them have topics related to monetary policy and the outlook of the U.S. economy. Look for details on all of next week's activities in Sunday evening's weekly preview.
If I were considering financing/refinancing a home, I would....
Lock if my closing were taking place within 7 days... Lock if my closing were taking place between 8 and 20 days... Lock if my closing were taking place between 21 and 60 days... Float if my closing were taking place over 60 days from now...
This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.
*https://www.homeloanmortgageco.com/DailyRateLockAdvisory
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