Market Update - April 4, 2025

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This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.

Rates are provided by Housing Wire in conjunction with Polly. Rates are updated in real-time. Polly data is calculated using actual locked rates. Rates are inclusive of locks that occur below par, at par and therefore consider discounts, points, and rebates. Rates are based on a scenario with a 780 Credit Score, <60% LTV, Purchase transaction. As of 04/03/2025 – @12:00 PM EST.

A chart titled 'A Quick Look Back,' summarizing key economic events from April 4 to April 10, 2025. The table includes Event Date, Event Name, Actual Data, Forecast, Previous Data, and Commentary. On April 4, the Non-Farm Payrolls report showed that the U.S. economy added 228,000 jobs in March, significantly exceeding the forecast of 135,000 and up from February’s revised 117,000. The health care sector led the way with 54,000 new positions. Despite strong job growth, the Unemployment Rate also rose slightly to 4.2%, up from 4.1% in February, indicating more people entering the labor force. Average hourly earnings increased by 0.3% month-over-month. On April 10, the Core Consumer Price Index (CPI) for March rose just 0.1% month-over-month, below the expected 0.3% and down from February’s 0.2% increase. Year-over-year, the Core CPI rose 2.8%, below both the 3% forecast and the previous month’s 3.1%, marking the lowest annual core inflation rate since March 2021. This suggests easing inflationary pressure, particularly in core categories excluding food and energy. Also on April 10, Initial Jobless Claims for the week ending April 5 came in at 223,000, matching expectations and up from 219,000 the previous week. The four-week moving average remained steady at 223,000, and continuing claims dropped to 1.85 million, coming in below market expectations, signaling ongoing labor market resilience.

Market Commentary 

Interest rates remained flat for the week of March 28th to April 3rd, 2025. Rates continue to trend down. Experts agree we won’t see mortgage rates in the 2% to 3% range in our lifetimes. However, rates around the 6% level are entirely feasible if the U.S. succeeds in controlling inflation and lenders feel confident about the economic outlook. In fact, rates dipped slightly at the end of February, falling closer to the 6.5% mark than had been observed for some time. Historically, rates in the vicinity of 7% are not abnormally high.

Currently, with uncertainty about how far President Donald Trump will go in implementing policies such as tariffs and deportations, some analysts fear the labor market could tighten and inflation could reignite.

Fed Watch: Target rate (in bps) possibilities, according to the CMEGroup (as of 04/03/2025 – 12:00 PM EST):
Market Review: Optimal Blue’s Production Metrics:

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Inventory is a key housing metric—here’s what state level inventory is telling us right now:

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Average Sales Price of House by Region

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Total Tariffs      

Earlier today, President Trump imposed tariffs on the vast majority of imports entering the US. Retaliation from Canada, China, the EU, and other nations is now guaranteed. This trade war will reduce trade, raise prices, increase unemployment, and weaken economic growth. It will, regrettably, not meaningfully reduce the trade deficit. I wish this focus on the benign trade deficit was instead lavished on the profoundly large and growing budget deficit. - Elliot F. Eisenberg, Ph.D., Economist

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News You Can Use:

·       Mortgage rates and demand seem stuck in a holding pattern, as markets await tariff news

·       Economic Anxiety Holds Rates Near December Lows

·       Home Prices Are Rising Fast in the Midwest

·       Baby Boomers Regain Top Spot as Largest Share of Home Buyers

·       More homes are finally hitting the spring market. Will buyers take the plunge?

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*Communication is intended for Industry Professionals only and not intended for Consumer Distribution

Interest rate and annual percentage rate(APR) are based on current market conditions as of 04/03/2025, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. Actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Prosperity Home Mortgage, LLC. Not available in all states. Rate is as of 04/03/2025 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac’s economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac’s business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.

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