Hi Reader,

The average 30-year fixed mortgage rate ended the week at 6.53%, down from 6.58% the prior week, according to Mortgage News Daily. Freddie Mac reported 6.49%, up from 6.47% the week before.

(Freddie Mac’s number is a weekly average and can lag what is happening in real time, while Mortgage News Daily tends to reflect the day-to-day market more quickly.)

Why rates eased slightly

The main reason for the slight dip is that Treasury yields moved down as inflation fears eased.​

The 10-year Treasury yield, which mortgage rates tend to follow, fell for the third consecutive week, ending around 4.37%. That helped mortgage rates move slightly lower in real time.

The main driver was oil prices. Earlier geopolitical tension had pushed markets to worry that energy prices could move higher, which can feed into inflation. But this week, oil prices dropped sharply, with crude falling back near pre-war levels.

This morning, as you can see by the chart above, crude oil futures were at about $70, down from a peak of $112 in April.

That matters because lower energy prices can cool inflation expectations, and when inflation fears ease, Treasury yields often fall.

At the same time, the economic data remains mixed.

​May PCE inflation accelerated to 4.1%, which is still not exactly comforting, but it was expected. Durable goods orders fell more than expected, suggesting some softness in business activity. First-quarter GDP was revised higher, and jobless claims fell more than expected, so the economy is not exactly falling apart either.

That is why rates are not plunging. The market is trying to balance two competing trends: 1) inflation is still too high, and 2) mixed economic outlook.

For buyers, the important takeaway is that mortgage rates are not moving in a straight line. They are reacting to a mix of inflation, energy prices, Fed expectations, economic data, and global risk. But for now, the recent move has been modestly helpful.

What this means for buyers

A small move lower in rates does not suddenly make homes affordable, but it can improve buying power at the margins.

More importantly, it gives buyers a reminder that waiting for a perfect rate environment is not always the best strategy. Rates can move down, but home prices in many local markets are still moving quickly, especially in the Northeast.

Real estate news - Spotlight on NJ

​The New York-Newark-Jersey City area posted one of the biggest year-over-year jumps in market heat, with homes selling faster and getting more attention. Homes in the region were on the market for a median of 42 days, moving 7% faster than last year and 10 days faster than the national pace.

The Jersey Shore has also seen major price growth, with Monmouth County’s median home price up a shocking 73% since 2020 and Ocean County up even more, over 90% that same period.​

A note on co-ops

I hear a lot of mortgage professionals say things like, “I don’t do co-ops. They are too much of a hassle.”

I look at it differently.

Co-ops are an important entry point for many buyers, especially in New York. Whether it is a super selective building with a complicated board package or a more affordable co-op unit with a 10% minimum down payment, I can help get the job done.

Co-op financing is not usually a sprint. It is more of a long-distance event.

But I am willing to go the extra mile for your co-op clients, including:

1. Upfront due diligence on the building
2. Careful review of the buyer’s financial picture
3. Structuring the file so the client is presented in the best possible light
4. Persistent follow-up with the lender, management company, and other parties to help the deal close as quickly as possible

So if you have a co-op buyer, even one with a complicated scenario, I am happy to take a look early and help figure out the best path forward.

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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