This week’s economic news brought renewed attention to inflation, interest rates, and the housing market. April’s CPI report came in hotter than expected, driven largely by higher energy prices. While the housing market continues to show resilience, elevated mortgage rates are clearly keeping spring and summer transaction activity more subdued than many had hoped.
The labor market added 115,000 jobs in April, which was slightly better than expected, though overall job growth remains modest. The unemployment rate held steady at 4.3%, while previous months’ job numbers continued to be revised lower.
Existing home sales remain stuck near the 4 million annual pace, a level we’ve seen for more than three years. Today’s market conditions are comparable to periods like the mid-1990s and the years following the housing crisis. The reasons are familiar:
• Affordability challenges remain significant. Home prices surged dramatically between 2019 and 2023, while mortgage rates climbed sharply from historic lows.
• Many homeowners who secured ultra-low mortgage rates during 2020–2021 are reluctant to move and give up those favorable terms.
• At the same time, buyers face higher monthly payments and continued uncertainty about future rates.
The positive news is that affordability has been slowly improving in some markets as home prices stabilize and mortgage rates ease slightly from their highs. Additionally, life events eventually outweigh the “rate lock-in” effect, bringing more buyers and sellers back into the market over time.
Inflation, however, remains the major concern. April’s CPI jumped to 3.8% year-over-year, with core inflation also rising. As a result, expectations for Federal Reserve rate cuts in 2026 have faded considerably. Markets are now even pricing in the possibility of additional rate hikes later this year.
Kevin Warsh was officially confirmed as the new Federal Reserve Chair. He steps into a challenging environment with inflation pressures still elevated and ongoing political pressure surrounding interest rate policy.
Mortgage rates were relatively stable this week according to Freddie Mac, but bond market reactions to the inflation data have already started pushing rates slightly higher again. Current market expectations strongly suggest the Fed will keep rates unchanged through at least September, with little expectation of cuts this year.
As always, real estate remains highly local. Even in a slower national market, opportunities still exist for both buyers and sellers who are properly prepared and informed.
If you’re curious about your home’s current value, considering a move, or simply want to discuss today’s market conditions, I’m always happy to connect and help guide you through your options.
Please feel free to reach out anytime, and visit my website to stay updated on the latest market trends and available opportunities.
Warm Regards,