Mortgage News

Speaking from my Engineering days, If the data collected is inaccurate, incomplete, or low quality (“garbage in”), any analysis, insights, or decisions made using that data will also be flawed or misleading (“garbage out”).

The Wall Street Journal article spoke to the staffing shortages at the Bureau of Labor and Statistics -BLS a U.S. Government agency hit by staffing cuts.

The BLS Report is utilized to calculate the inflation rate. These are actual people or statisticians going out and physically checking prices on groceries and other commodities. With less staff they have to guess or substitute.

Other Headlines:

• Challenger Job Cuts: Announced layoffs are up 80% compared to this time last year.
• Beige Book: Reports declining economic activity across several regions.
• Initial Jobless Claims: Increased by 8,000 to a total of 247,000.

My Take:
While these headlines may seem negative at first glance, they actually signal positive movement for interest rates. Slower job growth and economic softening tend to ease inflation concerns — a key focus for rate policy.

With the BLS report due tomorrow, expectations are for a cooling labor market, marked by slower hiring and a potential uptick in unemployment.

If that plays out, we could see rates begin to trend downward — possibly meaningfully — as we move into summer.

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Those of us who’ve been around the block a few times — say, 12 years ago — remember what deflation looked like.

It was a magical time when:

• Steak night turned into “Hey, chicken’s great too!”
• That snack your kids love? Suddenly it was, “Let’s try something similar… and half the price.”
• Craving a soda? Congratulations! You’ve discovered the kitchen faucet — nature’s original soft drink, now with 100% fewer bubbles and all the hydration.

Deflation wasn’t just economic — it was a lifestyle.

The May ADP Jobs Report came in well below expectations, with just 37,000 jobs created versus the 115,000 forecasted. The sharpest weakness was seen among small businesses (1–49 employees).

In a notable detail, goods-producing businesses lost 2,000 jobs — a potential canary in the coal mine for broader economic trends.

My take:
If job growth continues to decline, we’re likely to see bond yields fall, which in turn puts downward pressure on interest rates. A softer labor market typically supports rate relief.

Have a fantastic rest of your week and always feel free to reach out to our team. http://www.YourApplicationOnline.com.

Your home (or future home) is a solid, appreciating asset.

• Home prices rose 0.6% in March.
• April data projects a 5.3% growth in home values over the next 12 months.

Job market highlights:

The Leisure and Hospitality sector saw a decline for the third consecutive month, removing 92,000 job openings in April alone.

Job openings increased by 191,000, reaching 7.39 million — well above estimates.

The quits rate fell to 2%, a historic low — indicating fewer people are confident enough to leave their current jobs.

Most new job openings came from the Professional and Business Services sector.

While the bond market moved in a rate-friendly direction, it’s clearly staying measured and reserved.

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Not one to shy away from a clicky headline myself, but I think Redfin might be playing fast and loose with their math — or borrowing a calculator from a toddler.

They claim there are 1.94 million sellers and 1.45 million buyers… which sounds impressive until you remember that current inventory is 1.45 million, and about 500,000 of those are already under contract. That leaves just 960,000 active listings.

So unless we’ve entered a parallel universe where sellers are cloning homes or buyers are invisible, something doesn’t quite add up.

Front-Running and the GDP
There’s an old adage: “History is written by the winners.” In this case, we saw a spike in inventory driven by front-running — companies buying ahead of the anticipated tariffs.

It’s a reminder that information is often presented by those in control, not necessarily those most affected. The GDP data may show a temporary boost, but it’s not always the full story — sometimes it’s just the version told by the ones holding the pen.

My Take

Tariffs impact more than just the cost of goods — they also weigh heavily on consumer confidence. The unpredictable, on-again/off-again nature of tariff policies creates uncertainty, which is never good for anyone — whether you’re a business owner or a consumer. Stability and clarity are key to sustained economic confidence.

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A face-to-face meeting between Fed Chair Powell and the President — described as cordial at best.

We’re all hoping for mortgage rates to come down. Elevated rates are putting pressure on the housing market, keeping millions of homeowners locked into sub-3.25% mortgages and discouraging them from selling. This dynamic contributes to historically low inventory and, in turn, continues to push home prices higher.

At some point the cure is worse than the disease.

Personal Consumption Expenditures (PCE) rose 0.2% as expected

• Personal Consumption Expenditures (PCE) rose 0.2% as expected
• Incomes rose 0.8% expected as 0.3%
• Social Security payments rose 6.9%
• Trend for PCE continues to move down. Good News.

Have a fantastic weekend. we feel the tide shifting in the right direction.

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Q1 GDP came in at -0.2%, slightly better than the expected -0.3%, but still reflects a slowdown—particularly in personal spending, which rose just 1.3% compared to the 1.8% estimate.

This points to weaker consumer demand, which in turn eases pricing pressure. With fewer buyers in the market, retailers are often forced to lower prices to attract spending—ultimately helping to bring inflation down.

The power of the consumer at work.

Another sign of slower consumer spending comes from the latest Apartment List Rent Report, which showed new rents rose just 0.4% in May, while rents are actually down 0.5% year-over-year.

This is especially notable because May is typically a peak season for rentals, when demand — and prices — usually trend higher.

Also worth noting: the national vacancy rate is holding at a historically low 7%, a key factor we haven’t touched on before.

The halt on Tariffs has had a positive impact not only to the stock market but the bond market as well.

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With a new prospect of Fannie Mae and Freddie Mac exiting conservatorship and potentially going public has sparked both fear and excitement.

Lets do a quick breakdown:

Positive Impacts:

• Windfall for U.S. Government – recoup bailout funds from 2008.
• Increased Market Efficiency – market driven decision making, competition and innovation.
• Reduced Government Risk – shifting losses to private investors.
• Capital Market Benefits – raise capital and enhance their financial stability.

Negative Impacts:

• Increase in Mortgage Rates – Privatization to higher returns and higher rates.
• Reduced Access to Credit – impacts to less qualified borrowers with higher credit standards.
• Market Disruption – Government to Private is complex and disruptive.
• Financial Instability – if mismanaged could destabilize housing market.

My Take:

I lived through the 2008 financial crisis and saw firsthand both the positives and the pitfalls when Fannie and Freddie began competing with subprime lenders for market share.

It was a fun ride — until it wasn’t.

Healthy competition is a good thing, and this move has the potential to spark innovation and open up the marketplace. That said, with the government still retaining a degree of control, the guardrails remain in place — and that’s reassuring.

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