No one in places like Florida or Myrtle Beach or Colorado’s Glenwood Springs wants to wake up to a headline, sensationalist or not, saying, “Vacation homes (about 7 million in the U.S.) are being dumped at a rapid rate as fresh fears of a housing market crash, and a shrinking pool of renters, rattle sellers. “The number of people buying second homes has plunged to its lowest level since records began, and is under a third of what it was during the pandemic boom. A toxic mix of sky-high mortgage rates, soaring maintenance costs, and a widespread return-to-office push is fueling the trend.” Mortgage rates and the economy will certainly be a topic at the upcoming NY conference, as well as today’s Capital Markets Wrap, sponsored by Polly, at 12PM PT where the panelists will analyze the Fed’s recent meeting and its potential impact on market trends. They’ll also discuss the return of focus to economic data amid steadier volatility, changes in tariffs, and how technology is enhancing transparency and efficiency in capital markets. (Today’s podcast can be found here and Sponsored by TRUE and its Mortgage Operations Service (MOS) AI background worker, which transforms borrower documents into instant, trustworthy data for real-time decisioning. TRUE helps lenders accelerate decisions, cut costs, and deliver superior borrower experience, all without a $100M tech budget. Hear an Interview with Servbank’s Luke Jensen on how servicers are leading the way in AI and automation, and revolutionizing customer experience with innovative, loan-level customized correspondence solutions.)

Tuesday brought the release of an economic report that has frequently been responsible for big swings in mortgage rates. The Consumer Price Index (CPI) is the earlier of the two big inflation reports from the US government, and inflation is a big deal for interest rates.  In general, higher inflation coincides with higher rates and vice versa. But today’s CPI data was likely to be taken with a grain of salt due to the to-be-determined impacts of tariffs and trade deals on the price of imported goods and materials. In other words, if inflation came in lower than expected, it wouldn’t matter as much as normal because. The only real risk was that inflation would come in higher than expectations, thus suggesting that any tariff-related impact would be hitting an already elevated price trend. Thankfully, today’s report was slightly lower than expected, even though it moved up from last month’s levels. As expected, that didn’t do anything to help rates. In fact, the average lender is just a hair higher than yesterday owing to market movement that happened later in the day.

All of those surveyed by Wolters Kluwer for its May Blue Chip Economic Indicators report ruled out the possibility the Fed could raise short-term rates.

April was a mixed bag for title companies, executives said on earnings calls, but some are expecting a stronger market the rest of the year.

A 90-day pause on reciprocal tariffs between the U.S. and China boosted the near-term economic outlook for banks, but tensions and uncertainty around trade barriers remain high.

The allegations against New York’s attorney general involve transactions that occurred over decades, but James called the charges political retaliation.

Federal Reserve Gov. Adriana Kugler said in a speech in Dublin that trade barriers could soon affect prices and slow down growth while increasing uncertainty in 2025.

Nearly a thousand of us head to Manhattan in less than a week for the MBA’s Secondary Conference. In 2025 Q1, the median asking rent in New York City registered at $3,397, an increase of $179, or 5.6%, compared with a year ago. Sounds appropriate, given wage growth. In other rental news, the Missouri legislature passed a bill allowing landlords to discriminate against low-income renters. The Missouri Senate gave final approval to House Bill 595 which would prevent cities from enacting certain renter protections. This Bill was prompted by local legislation in some communities, most notably Kansas City, which bans landlords from denying leases to renters on the grounds that they receive housing assistance. Bill 595 would prevent cities from banning that practice, sometimes called source-of-income discrimination. One of the most common types of housing assistance is federal Section 8 housing vouchers, which allow low-income renters to have a portion of their rent covered by the government. State and federal government policy will be one of the topics on today’s episode of Now Next Later at 10AM PT. Sasha and Jeremy sit down with Taylor Stork, President of the Community Home Lenders of America, to reflect on CHLA’s recent Spring Fly-in in Washington, D.C., major policy discussions, key industry concerns, and how mortgage professionals can remain involved in shaping the future of lending. (Today’s podcast can be found here and Sponsored by TRUE and its Mortgage Operations Service (MOS) AI background worker, which transforms borrower documents into instant, trustworthy data for real-time decisioning. TRUE helps lenders accelerate decisions, cut costs, and deliver superior borrower experience, all without a $100M tech budget. Hear an interview with Cotality’s Selma Hepp on the complex dynamics of the 2025 spring housing market, offering a nuanced view of the pressures and opportunities shaping today’s buyers, sellers, and lenders.)

Tariffs and trade policy have been a new and important consideration for the bond market for just over a month now. That matters to mortgage rates because mortgage pricing is primarily determined by bond prices.   The reaction function for rates is a bit complicated at first glance because tariffs can exert influence in opposite directions. To whatever extent trade policy results in lower economic growth, it would generally be good for rates, all other things being equal. To whatever extent trade policy results in higher prices, lower revenue, and lower foreign demand for US assets (which tends to correlate with trade relationships), it would push rates higher.  Over the weekend, the US and China agreed on a 90 day pause on the more extreme tariff brinksmanship.  While levels remain elevated enough to cause some inflation concern (remember: bad for rates), they’ve come down enough to alleviate some concern about the global economy (also bad for rates).  Today’s move wasn’t huge as far as mortgage rate volatility goes, but the average lender is now up to the highest levels in just over 2 weeks. [thirtyyearmortgagerates]

Is All News Bad News For Bonds? Will CPI Matter?

At times these day, it may seem like all news is bad news for bonds.  Higher tariffs hurt us in mid April, and lower tariffs are hurting us now.  There are reasons for the paradox. Higher tariffs initially helped quite a bit, but overly high tariffs caused a liquidation that hurt both sides of the market. The 90 day US/China pause announced this morning leaves tariffs high enough to put upward pressure on rates via the inflation channel, and low enough to rob rates of the bullish impulse from the recession channel. The lack of finality means we’re waiting months and months before accurately understanding the impacts, and the big bounce in stocks suggests there’s room to unwind previous “risk-off” trades in the meantime. 

Market Movement Recap

11:14 AM sharply weaker overnight, but erasing some losses now.  MBS still down 6 ticks (.19) and 10yr down 5.6bps at 4.441

02:11 PM drifting back to weakest levels.  MBS down 10 ticks (.31) and 10yr up 7bps at 4.456

04:56 PM Heading out near the weakest levels with MBS down 3/8ths and 10yr yields up 8.6bps at 4.471