Friendlier Rates Amid Mixed Signals for Housing

With Memorial Day shortening the trading week, markets were fairly calm last week—especially on the rate side. Stocks saw some swings thanks to earnings reports, but mortgage rates mostly stayed flat or dipped slightly after a bigger drop on Tuesday.

That Tuesday drop? It wasn’t about fresh news—it was just lenders catching up to last week’s improvement in the bond market. Heading into a holiday, it’s pretty typical for rate sheets to lag a bit.

One thing to flag: a lot of headlines this week misrepresented what actually happened with mortgage rates. That’s because most use weekly survey data, which lags real-time conditions and still included last Thursday and Friday’s higher rates. In reality, most lenders ended the week slightly lower than the one before.

On the housing front, the data was a mixed bag:

• Refinance applications dropped (expected, given last week’s bump in rates).
• Purchase applications ticked up a bit.
• Pending home sales made news with scary headlines, but really, we’re just continuing the same sideways pattern we’ve been in for months.

We also got March home price data from Case-Shiller and FHFA. Overall, prices are still climbing—slowly—but staying above zero is still a win. That said, Case-Shiller’s seasonally adjusted numbers showed their first monthly dip since early 2023. Nothing major yet, but something to keep an eye on.

Meanwhile, a trade court temporarily blocked some Trump-era tariffs midweek, which caused a quick spike in both stocks and bond yields. But the news broke in the evening U.S. time, so the next morning, traders quickly walked it back. By the afternoon, the court clarified: tariffs are still on—for now—while the appeals process plays out. Translation: not much has changed.

Bond markets got an extra boost Thursday morning from weaker-than-expected economic data. Friday’s inflation numbers didn’t move the needle much—markets are waiting to see if tariffs affect inflation, but that likely takes months to show up in reports.

Looking Ahead: Jobs & PMIs

Next week’s big focus? Economic data. Both key Purchasing Managers Index (PMI) reports drop Monday and Wednesday, followed by the always-important jobs report on Friday. As usual for the start of the month, we’ll also get a handful of supporting reports that could shake things up.