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Over the past 30 days, the mortgage market has been taken for quite a ride. We saw mortgage rates rise sharply as oil prices spiked and inflation fears intensified. However, just as quickly with a potential, indefinite extension of the ceasefire, rates are starting to float back down, slowly but surely.
The volatility in mortgage rates mirrored buyer sentiment. While the beginning of the year started strong with buyer demand, fears of the war, inflation, recession and the uncertainty of war gave the real estate market a slight pause. However, as the end of the Iran War appears to near, home sales are increasing again with a 2% increase year over year in March, with increasing sales in April. This speaks to pent up buyer demand.
As buyers await lower mortgage rates, all eyes are on the confirmation hearings for Jerome Powell's replacement as Chair of the Federal Reserve, Kevin Warsh. Warsh has big plans to reform the Fed, by ditching antiquated measures of inflation, restricting off the cuff statements from Fed members, hold closed meetings, and changing the way the Fed communicates. It is no secret that President Trump expects him to rally behind lowering the Federal funds rate, which in turn would most likely lower mortgage rates. However, despite Trump's expectations, it is generally believed that the Fed will hold rates steady with no aggressive rate cuts until late 2026 or beyond. The current consensus is a mid to low 6% rate environment for the remainder of 2026.
With increased buyer demand, values are holding strong and continuing to increase.
