June 24, 2025 – The Verdict Is In

Economic Commentary

Last week, the Federal Reserve’s Open Market Committee met to consider the present and future direction of interest rates.  Most analysts did not expect a rate decrease at this meeting, despite increased pressure from the Administration.  It turns out that these predictions were right on point. As we pointed out last week, the recent data on inflation has been encouraging — including the Consumer Price Index released two weeks ago.

The most recent jobs report seemed to bolster the analysts’ predictions of another month of no rate changes. Even though the increase of 139,000 jobs was seen as a sign that there is no recession on the horizon, the number of jobs added last month and over the previous quarter is lower than it has been for the past two years. And the revision of the previous two months of job data downward by 95,000 jobs has reinforced the notion that the job market is weakening somewhat.

We will repeat our usual statement – no recession is likely if the economy continues to add jobs. However, the economy is clearly slowing in light of the fact that job gains have eased. Plus, the reduction of Federal jobs and the implementation of tariffs are still working their way through the economy. Thus, if the number of monthly job gains falls below 100,000 – it is much more likely that the Fed will take action – especially if inflation stays where it is today.  And if the tariff situation is resolved or at least eased through negotiations, the certainty of future rate cuts will increase significantly.

Weekly Interest Rate Overview

The Markets. Mortgage rates continued to ease moderately in reaction to soft economic and inflation data. According to the Freddie Mac weekly survey, 30-year fixed rates eased to 6.81% from 6.84% the previous week. In addition, 15-year loans decreased slightly to 5.96%. A year ago, 30-year fixed rates averaged 6.87%, slightly higher than today. Attributed to Freddie Mac: “Mortgage rates moved lower, with the average 30-year fixed rate reaching a four-week low. More available inventory to choose from, coupled with this week’s decline in mortgage rates, could be the spark to get potential homebuyers off the sidelines.” Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

The May Monthly Home Trends Report from Realtor.com indicates that the U.S. home market is making a resurgence, although the recovery is highly fragmented. The number of homes for sale in the U.S. surpassed one million for the first time since winter 2019, according to recent data.  Inventory increased in all four major U.S. regions in May. So, what does this mean for potential buyers still looking to attain the American Dream? “The number of homes for sale is growing, and even hit a key milestone in May, with more than a million active listings. But not every housing market is equally well-supplied,” said Danielle Hale, Chief Economist at Realtor.com. “Recent construction trends explain a lot of the variation in recovery that we see across markets. Many markets that built aggressively during and after the pandemic are now seeing more listings, longer time on the market and even some modest price softening. In contrast, markets that didn’t build as many homes are still facing an acute shortage, which continues to prop up prices and limit buyer options.”   “More homes on the market means buyers finally have options and leverage they haven’t had in years,” said Gary Ashton, Founder of The Ashton Real Estate Group of RE/MAX Advantage in Nashville. “But the strategy for buyers and their agents this spring largely depends on where you live. In Southern locales, like Nashville, the average sales price has increased by 3% as homes remain on the market for longer and local supply increases. We can expect to see sellers get creative by offering concessions to buyers and start to consider more price reductions.”   Source: Realtor.com

The much-anticipated spring home-buying season did not fully bloom as cautious consumers navigate record-high home prices, persistently elevated mortgage rates and a volatile economic landscape. Still, some green shoots are emerging, with various regions seeing a deceleration in home price growth and gradually expanding inventory. U.S. home prices posted a 3.9% annual gain in February, down marginally from the 4.1% annual growth released in January, according to the S&P CoreLogic Case-Shiller Home Price Index, which tracks single-family home values. This report reflects home sales from December 2024 through February 2025, a period marked by expanding inventory and a modest softening of mortgage rates.  Home prices continue climbing, but the pace has slowed considerably compared to several years ago, and industry experts expect price growth to cool further as households contend with looming economic uncertainty. This slowdown won’t improve affordability enough for many would-be buyers. Nonetheless, there is a glimmer of hope as regional variations continue to make some markets more affordable than others. “[T]he record low supply of houses on the market protects against a market crash,” says Tom Hutchens, executive vice president of production at Angel Oak Mortgage Solutions, a nonqualified mortgage lender.  “For the best possible outcome, we’d first need to see inventories of homes for sale turn considerably higher,” Keith Gumbinger, vice president at online mortgage company HSH.com, tells Forbes Advisor. “This additional inventory, in turn, would ease the upward pressure on home prices, leveling them off or perhaps helping them to settle back somewhat from peak or near-peak levels.”  Mortgage rates also need to decline to see a meaningful increase in housing market activity. Gumbinger warns that rates cooling too quickly could create a surge in demand that would wipe away any inventory gains, causing home prices to surge. He adds that mortgage rates eventually returning to a more “normal” upper-4%-to-lower-5% range would be helpful to the housing market but predicts it could be a while before we return to those rates.  Source: Forbes

Getting married and buying a first home: two days representing some of the happiest – and most expensive – days most people ever celebrate. The average wedding costs $36,000, according to the wedding registry platform Zola. The average home down payment is $55,500, according to real estate data firm ATTOM. In a market where baby boomers have the upper hand some forgo a big wedding and put that money toward their home down payment. Is it possible to have both? A rising number of engaged couples want cash for a house from their wedding guests, instead of the typical “air fryers, fancy gravy bowls, blenders, and towels,” according to Zola.  In a survey of 6,000 couples registered on Zola this year, 87% are asking for cash and 41% are specifically requesting it for a home down payment, according to the company’s 2025 First Look report.  “Society has really moved in that direction and generally people are very comfortable giving cash, especially when they know what it’s going toward,” said Emily Forrest, Zola’s spokesperson.  Janelle Sallenave, chief spending officer at the financial services company Chime, said it’s not unreasonable to request cash from wedding guests, but the way couples ask is crucial. A couple should provide details about where the money is going, like the house they plan to buy or the neighborhood they’d like to move into, Forrest and Sallenave said. Avoid asking for specific amounts and make sure to send personalized thank-you notes, Sallenave added.  Source: USA Today