Rocket Fuel Newsletter – Rates dip, confidence wavers: A must-read market snapshot

As it turns out, the hottest spot in town might just be your own living room. With more Americans swapping in dress shoes for slippers and dinner reservations for charcuterie boards, staying in is having its moment. With control over the music, the menu, and the mood, it’s no wonder we’re trading crowded bars for curated nights in.

This week, we explore the current landscape of home sales, rent trends, and the importance of confidence.

Fuel up! 🚀  

Mortgage rate dip fuels new home sales in March

According to the National Association of Home Builders, new home sales picked up in March, rising 7.4% from January and 6% year-over-year. This is all thanks, in part, to a dip in mortgage rates and limited resale inventory.

The average 30-year fixed mortgage rate dropped from 6.84% in February to 6.65% in March, slightly improving affordability. Builders also saw strong demand at lower price points, with notable sales gains in homes priced under $400,000. Inventory of new homes rose modestly: regional trends were mixed with the South seeing solid growth and other regions posting declines.

Existing-home sales decline

In March, existing-home sales fell 5.9% to a seasonally adjusted annual rate of 4.02 million, as high mortgage rates continued to weigh on affordability.

Despite this slowdown, the median sales price hit a record for the month at $403,700, marking the 21st straight month of year-over-year price increases.

Inventory rose to a 4-month supply, providing more options for buyers, but sales declined in all four regions. First-time buyer activity did tick up slightly, while cash sales and investor purchases declined from February levels.

Pending-home sales surge

Pending-home sales jumped 6.1% in March, marking the strongest monthly gain since December 2023.

This is thanks, in part, to the modest mortgage rate dip and a seasonal uptick in activity. While year-over-year contract signings were down slightly overall (-0.6%), the Midwest saw annual growth.

Regionally, the South led March’s gains with a 9.8% increase, while the Northeast dropped 0.5%. The chief economist for the National Association of REALTORS® noted that the uptick suggests a growing pool of potential buyers, driven by job growth and early spring market momentum.

The case of Austin’s rent drop

Austin saw the steepest rent decline among major U.S. metros in Q1 2025 at -4.2% year-over-year.

While this may seem unusual at first, it’s actually the predictable outcome of increased housing supply. Developers responded to a post-COVID surge in demand and rent growth by building more units, which in turn cooled rents – a pattern seen across the country.

Confidence is key, and uncertainty can be costly.

For industries with tight margins and inflexible supply chains, like auto manufacturing, the Trump administration’s tariff negotiations create challenges, as uncertainty around final duty rates makes it difficult to plan and route supply chains effectively.

While Amazon was criticized for rumors that they were adding tariff fee itemization to their checkout pages, Ford CEO Jim Farley announced a “wait and see” approach to understand how other auto brands adjust their pricing.

But certainty isn’t just important for producers, it's paramount for consumers as well.

Since the historic Federal Reserve rate hikes in 2022, talking heads have been expecting an impending recession.

Yet, retail sales reports and consumer confidence reports kept coming in strong, even as lockdown-era savings dropped, and credit card leverage spiked.

After 100 days in office and Trump fully into his trade rebalancing act, he’s now forced to balance his approval rating.

The wealth effect is a phenomenon where people feel wealthier and spend more when their asset portfolio is appreciating (and, naturally, feel frantic when their 401(k) returns go negative).

As Trump focuses on the labor market rather than the stock market, he’s getting a reminder of how important the stock market and the general media narrative are to consumer confidence.

And for anyone who’s ever looked at the breakdown of U.S. GDP, they’d know how important the U.S. consumer is to its health, making up around 70% of the economy.

With consumer confidence sinking to levels seen in the depths of COVID lockdowns, Trump may be reminded that whatever mandate he has isn’t without its limits.

Purchase season is here. Stay prepared by engaging with industry leaders and discovering what’s next. We’ll be at these top events—let’s connect! 

  • May 8: California Mortgage Expo - LA South, Irvine, CA (Use the exclusive code ROCKETFREE to waive the registration fee for this event). 
  • May 14: Utah Mortgage Expo - Park City, UT (Use the exclusive code ROCKETFREE to waive the registration fee for this event).  

Our top solver last week was the only one to finish in less than a minute. With a time of 57 seconds, first place was 11 seconds faster than anyone else.

This week’s puzzle gets 3 Rockets out of 5.

Click here to solve!

Good luck!