May 9, 2025
Reports and articles referenced:
VIDEO TRANSCRIPT:
- I’m Danielle Hale, Chief Economist at Realtor.com®. This week I’m going to cover the Fed meeting and what it meant for mortgage rates. I’ll also discuss home purchase sentiment, Realtor.com weekly housing data, and April’s Hottest Housing Markets. Finally, I’ll review insights from our latest report on trends for newly built homes.
- The biggest economic event of the week was the Fed meeting that concluded on Wednesday, but it wasn’t a big surprise. The Fed kept rates steady, as widely expected. The unemployment rate remains low, and inflation has generally improved. The Fed’s statement acknowledged higher risks on both sides of the dual mandate–the 2% inflation goal and full employment. If both risks were to materialize, and inflation were to rise at the same time unemployment goes up, that would make it harder for the Fed to set appropriate policy. But for now, policy appears to be just right, and uncertainty over which risk may dominate the future seems to mean the Fed is not interested in moving preemptively.
- While this week’s rates were largely based on data before the Fed’s announcement, they were unchanged at roughly 6 and three-quarters percent. Until there is more trade news, I don’t expect mortgage rates to change much, but that doesn’t mean home shoppers can take rates as a given. Trade news could come at any moment.
- A survey of consumers found little change in their outlook on mortgage rates and a notable improvement from last month’s outlier job concerns. This was enough to boost the index slightly from last month, but aside from last month, it’s the lowest reading in the last 16 months. Further, the share expecting their personal financial situation to get worse tied the previous survey-high set in June 2022.
- Realtor.com weekly housing data showed that sellers continue to list homes on the market giving buyers a growing number of options to choose from. This week’s data showed a bigger increase in asking prices–the highest in a year–but the share of listings with a price cut remains high, too. And homes spent a bit longer on the market this year compared to last. Although inventory still lags behind pre-pandemic norms nationwide and particularly in the Northeast and Midwest, in many parts of the South and West, it is not the logjam that it once was.
- The April Hottest Markets report reflects this. The most competitive markets were, once again, in the Northeast and Midwest.
- Finally, our Quarterly New Construction Report is out. We found that as new home prices fell and existing home prices rose, the price premium for a median new construction home was just 13.5% nationwide. This figure varies significantly by region, however. Premiums in the West and South were under 10% while premiums in the Northeast and Midwest were closer to 70%.
- You can find all the details, including full reports and our housing data for download, at realtor.com/research. You can also follow us on X (formerly twitter) for real time updates. And instagram for graphics.
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