Both the FHFA and Case‑Shiller home price indices were released today. While the data collection time frame is from April, they each suggest a similar shift is underway when adjusting for seasonality. Specifically, if we ignore seasonality, prices rose.  If we don’t, they were down 0.4% from March. FHFA House Price Index (seasonally adjusted, MoM)

April: −0.4%; March was revised from −0.1% to 0.0%

YoY: +3.0% from April 2024 to April 2025

Monthly figures varied regionally: the West South Central and South Atlantic divisions posted the steepest falls (−1.3%), while the Middle Atlantic rose +1.2%. All nine divisions remain positive YoY (ranging from +0.5% to +7.4%). The 0.4% drop is in line with slower spring momentum—not drastic, but a continued cooling from prior gains. The upward revision in March helps to offset April’s declines to some extent. Case‑Shiller National Index (unadjusted)

YoY: +2.7% in April, down from +3.4% in March

MoM (raw): +0.6%

MoM (seasonally adjusted): −0.4%

Yesterday saw mortgage rates fall to the best levels since early May.  Now, today, we’d have to go all the way back to the end of April to find anything lower.  Are the changes massive? Not by a long shot, but it sounds/looks that much better hear/read. This wasn’t destined to be the case today.  The underlying bond market actually began the day in a stance that would have kept rates sideways or just a hair  higher.   But after the morning’s economic data and Fed Chair Powell’s congressional testimony, bonds improved and the average mortgage lender was able to offer a mid day reprice. The data that mattered was the Conference Board’s Consumer Confidence Index.  Specifically, a closely watched component of that index, the labor differential (a measurement of consumers who day jobs are plentiful versus those who say jobs are hard to get), pointed to the weakest labor market conditions since the easing of initial covid lockdowns. At the same time, Fed Chair Powell began answering questions before the House Financial Services Committee.  He struck a slightly softer tone on potential rate cuts today compared to the press conference at last week’s Fed meeting and the bond market reacted accordingly. In general, when bonds improve enough during the day, mortgage lenders are increasingly able to execute a mid-day price change. 

Residential business is coming through in dribs and drabs for many lenders, but that doesn’t stop all the random news out there. To no one’s surprise, Compass is suing Zillow, the owner of Zillow Home Loans which has seen its volumes expanding nicely as of late. The inventory crunch is definitely behind us, as evidenced by Lennar (home of MBA Chair Laura Escobar) seeing its average sale price drop 8.6 percent. The U.S. House of Representatives passed the Homebuyers Privacy Protection Act (H.R. 2808). It will be matched up with the Senate’s version to iron out any differences, and then hopefully move up the food chain. It’s trendy to own a stadium’s naming rights, or a professional sports franchise. Think loanDepot, FBC Mortgage, Rate, or Dan Gilbert (Cavaliers), Mat Ishbia (Suns), and now… Union Home’s Bill Cosgrove? Yup, his name is in the mix along with Dream Finders Homes CEO Patrick Zalupski as being in “exclusive discussions” to purchase the Tampa Bay Rays baseball team. (Dream Finders had a busy 2024 reaching company records of 8,583 closings, a pre-tax profit of $438 million, and home building revenue of $4.4 billion, which is an increase of 18% compared with 2023.) (Today’s podcast can be found here and this week is sponsored by Optimal Blue. OB bridges the primary and secondary mortgage markets to deliver the industry’s only end-to-end capital markets platform, helping lenders maximize profitability and operate efficiently so they can help American borrowers achieve the dream of homeownership. Today’s has an interview with Duke professor Marvin Chang on how mortgage lenders should prioritize AI, aligning LO incentives with company incentives, driving costs down, and securing a return on investment.)

Powell’s prepared remarks and Q&A at today’s congressional testimony are showing the market a clearer path to the possibility of rate cuts in the near future.  While Powell certainly stopped short of echoing the more dovish tones of Waller and Bowman, this is a softer side of Powell that we haven’t seen this clearly in recent speeches.  Long story short, Powell is expecting tariffs to show up in data in June, and if they don’t, it sounds like he, too, could be open to cutting as soon as July. 

A new House vote brings long-awaited privacy protections for homebuyers one step from reality. See what still needs to happen.

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Best Closing Levels in More Than a Month

Don’t look now, but rates just inched their way down to the best levels since the first week of May.  It’s probably NOT fair to credit geopolitical developments for the bond market improvement.  While those developments arguably had an impact at times during the day, they were also arguably a zero sum game by the end of the day (due to a rapid de-escalation of armed conflict).  What’s left over is the improvement seen earlier in the day due to the shift in Fed Funds Rate expectations after comments from Bowman.  This no doubt increases the market’s anticipation for Fed Chair Powell’s congressional testimony over the next two days.

Econ Data / Events

S&P Services PMI

53.1 vs 52.9 f’cast, 53.7 prev

Existing Home Sales

4.03m vs 3.96m f’cast, 4.00m prev

Market Movement Recap

10:10 AM Modestly stronger overnight with additional gains after Bowman comments on supporting a July rate cut.  MBS up 6 ticks (.19) and 10yr down 6.3bps at 4.315

12:38 PM Slow, steady bond gains over the past 2 hours.  10yr down 8.3bps to 4.296 and MBS up 9 ticks (.28).

02:43 PM Off the strongest levels but still stronger on the day.  MBS up 7 ticks (.22) and 10yr down 5.8bps at 4.321

03:40 PM Technically down an eighth from the highs.  MBS still up 6 ticks (.19) and 10yr still down 4.6bps at 4.333