Is the housing market quietly gaining momentum?

Federal Reserve Chair Jerome Powell testified to lawmakers last week that the central bank will remain cautious about cutting interest rates, emphasizing the importance of upcoming inflation data.

Powell shared that the Fed expects a clearer picture of how recent tariffs may affect inflation in the months ahead after the Fed chose to hold rates steady at 4.25-4.5% earlier this month. While a July cut remains unlikely, many economists are still optimistic that a reduction could come by September.

Recent data indicates incremental improvements in the housing market. NAR’s May report showed a 0.8% increase in existing-home sales and a rise in inventory, while MBA’s latest weekly survey reported a 1.1% uptick in mortgage applications, led by a boost in FHA refinances. Though rates remain elevated, the market continues to adjust, with soft gains suggesting underlying demand and more opportunities for buyers. If rates ease later this year, experts anticipate stronger movement on both the buyer and seller fronts.

The House has passed the Homebuyers Privacy Protection Act, aimed at limiting the use of mortgage credit trigger leads and reducing unsolicited outreach to borrowers. With a similar Senate bill already approved, lawmakers are working to reconcile the versions and move toward final legislation.

Some organizations, such as the Mortgage Bankers Association (MBA), have shared their support for the bill, saying they will continue advocating for a final version offering consumers stronger privacy protections during the home loan process.

Cotality – formerly CoreLogic – recently released their Q1 2025 Mortgage Application Fraud Risk Index, which held steady quarter-over-quarter, but increased 7.3% year-over-year.

This annual rise in risk was largely driven by an increase in transaction-related risks, such as misrepresented sales details, hidden concessions, and rapid flipping. Income and occupancy red flags also ticked up modestly, especially in markets with lingering affordability pressures. 

The more things change, the more they stay the same.

If you’ve been waiting to hear a new story or trend when it comes to the sale of homes in the United States, you’ll have to wait at least another month.

Existing-home sales saw a slight bump last month but have been hovering at 4 million sales monthly since the Fed took rates up quickly in 2022.

The trend that’s still our friend is supply – while it’s no buyer’s market, sellers have certainly lost a little bit of power since COVID.

New-home sales have slowed slightly, pushing the total supply up toward its peak in 2022 when rates jumped quickly.  

If President Trump gets his wish and finds a more dovish Fed chair to replace Powell, perhaps we’ll see these two trends reverse with more sales and a tighter supply.

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!

·      July 10: Ultimate Mortgage Expo – New Orleans, LA (Free registration with code RocketFree)

·      July 17: Arizona Mortgage Expo – Chandler, AZ (Free registration with code RocketFree)