Insights from LendingTree's Chief Economist
The Fed met expectations by raising its benchmark Fed funds rate last week and signaling more hikes to come. Treasuries seem to have consolidated below 3% level and would need a catalyst to provoke a move. The week does not contain major data that is known to move Treasury markets. However, the impact of tariff disputes could dampen the rise in long-term rates.
Data this week will reveal the latest trends in the housing market. Already the homebuilder confidence index included a comment that tariffs have added $9,000 to the cost of new homes. CPI data last week also revealed a spike in prices of washing machines, a product targeted in an earlier round of tariffs implemented on Feb. 7. An escalation in the tariff war over the weekend between the U.S. and China will increase the costs of more household items and could put a damper on housing related spending.
Other data this week includes housing starts, existing home sales and home prices. Reflecting activity in April and May it will give a read on the strength of the spring housing market. We expect data to show some loss of momentum, though the housing market remains robust.
Low inventories pushing prices higher is the theme of this year’s housing market. Supply problems are particularly acute for lower priced homes. Sales for homes under $100,000 were down 13% Y/Y in April and those between $100,000 and $250,000 were down 1% Y/Y. Rising rates have yet to temper demand, which is supported by a robust labor market, thus buyers should do all they can to position themselves competitively. Getting financing in place ahead of the house hunt is crucial, and we strongly advise buyers compare multiple loan offers first.
- Tendayi Kapfidze
- Chief Economist
- About Tendayi
Monthly Mortgage Offer Reports
Released each month, The LendingTree Mortgage Offers Report contains data from actual loan terms offered to borrowers on LendingTree.com by lenders. Stay up to date with the most recent LendingTree Mortgage Offers Reports below: