Hi Reader,

The average 30-year fixed mortgage rate ended the week at 6.71%, down from 6.74% the prior week, according to Mortgage News Daily. Freddie Mac reported an average rate of 6.67%, down from 6.69% the week before.

(Mortgage News Daily reflects daily market conditions, while Freddie Mac reports a weekly average based on rates collected earlier in the week, so its numbers tend to lag the market and often differ.)

Mixed bag

If you only looked at last week’s economic data, you might expect mortgage rates to be falling more decisively.

​Inflation was relatively tame, producer prices were softer than expected, retail sales fell 0.6%, and consumer sentiment dropped 8%. Combined with weaker jobs data, that reduced expectations for another Fed rate hike and pushed shorter-term Treasury yields lower.

But longer-term yields told a different story. The 10-year Treasury ended Friday at 4.695%, actually up for the week.

Two things are keeping pressure on longer-term rates:

1. U.S. debt concerns.​
Investors are demanding higher yields to hold longer-term government debt. The 30-year Treasury auction yielded 5.216%, the highest since 2001.

So the market can expect the Fed to hold rates steady while still demanding more compensation to lend the government money for decades.

2. Oil remains a wild card.​
​Brent crude ended Friday at $88.52 a barrel, up nearly 6% for the week amid renewed Middle East tensions. Higher oil can reignite inflation concerns and put upward pressure on Treasury yields.

So mortgage rates, which track with the US 10-year Treasury yield - are caught between two forces:

Cooling inflation + weaker growth → lower rates​
​Debt concerns + higher oil → higher rates

That tug-of-war helps explain why rates are drifting lower rather than plunging.

I get this question all the time: "why haven't high mortgage rates pushed Northeast home prices down?"

This is one of the more interesting disconnects in today's housing market.

Higher mortgage rates have absolutely reduced the number of transactions. But in much of the Northeast, they haven't created an abundance of homes for sale.

And price is ultimately a function of supply versus demand.

Much of the Northeast still has a shortage of desirable housing. There was less new construction here than in many Sun Belt markets, and the region didn't experience the same pandemic-era building boom followed by a reversal in migration.

So even with fewer buyers, there often still aren't enough sellers.

That showed up very clearly in the data: the Northeast median existing-home price was recently up 5.7% year over year even while sales volume was down 12.2%.

That's a useful distinction for buyers:

High rates can slow the market without necessarily making homes cheaper.

In desirable Northeast markets, a well-priced property can still attract multiple buyers because the underlying inventory problem hasn't disappeared.

And I got a very tangible reminder of that this weekend.

One $800,000 house. Very different buyers.

I went out to Long Island this weekend to support an agent's open house for a well-priced home around $800,000.

What struck me wasn't just the turnout. It was the range of people who could potentially be the buyer.

1. There was an elderly couple buying a home for themselves because their current home had to many stairs.
2. A younger couple looking to buy a home for their parents that was in close proximity to their current home.
3. Parents with their son, who just got engaged and is looking to buy his first home.
4. A couple looking for their next investment property.

All walking through the exact same house, but potentially requiring completely different financing strategies.

That's one of the things I love about being a mortgage broker.

There isn't one generic "mortgage buyer."

I can help the entrepreneur who doesn't have traditional W-2 income. The investor building a portfolio. The young family qualifying on two salaries. Someone buying a home for a parent. Or the very straightforward salaried borrower who simply wants to make sure they're getting the smartest structure and price.

Same house. Very different financial lives. Very different mortgages.

If you have a buyer who's a little outside the standard box, or you just want to talk through a scenario before they start making offers, send them my way.

I hope your week is off to a great start!

-Nicole

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Nicole Hamilton Bernheimer | NMLS #2354049

nicole@homeownering.com, 917-650-0167

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