Market Update - April 18, 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. While other mortgage rates sites show rates being quoted to borrowers with top credit profiles, the HousingWire Mortgage Rates Center shows actual locked rates with borrowers of all credit profiles. 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 04/17/2025 – @12:00 PM EST.
A chart titled 'A Quick Look Back,' summarizing key economic events from April 10 to April 17, 2025. The table includes Event Date, Event Name, Actual Data, Forecast, Previous Data, and Commentary. On April 11, the Core Producer Price Index (PPI) for March rose 3.3% year-over-year, slightly below the expected 3.6% and down from February’s 3.4%. This measure, which excludes volatile food and energy prices, indicates modest easing in underlying producer-level inflation. Also on April 11, the University of Michigan’s preliminary Consumer Sentiment Index for April dropped sharply to 50.8, well below the forecast of 54.5 and down from 57.0 in March. This represents an 11% monthly decline and marks the second-lowest reading since records began in 1952, reflecting rising consumer pessimism. On April 16, Retail Sales for March posted a strong 1.4% month-over-month increase, beating the forecast of 1.3% and significantly up from February’s 0.2%. Growth was driven primarily by motor vehicles and parts sales, while core retail sales (excluding autos) still rose 0.5%. Year-over-year, retail sales were up 4.6%, suggesting healthy consumer spending momentum. Finally, on April 17, Initial Jobless Claims for the week ending April 12 fell to 215,000, better than the forecast of 225,000 and down from the revised previous week’s 223,000. This decline suggests continued labor market strength.

Market Commentary:

Interest rates increased slightly for the week of April 11th to April 17th. Average mortgage rates are edging lower, yet remain elevated as of Thursday, April 17, 2025, after a week of volatile swings that took the 30-year benchmark to three-month highs. New data from the National Association of Home Builders reports a slow start to the spring homebuying season, a result of growing economic uncertainty — including tariffs that have pushed borrowing costs higher and threaten to make homes more expensive.

While experts predict rates will move lower throughout 2025, it won't be a dramatic decline: Fannie Mae expects average 30-year fixed mortgage rates to remain around 6.5%. And with investors and lenders bracing for more news on Trump's trade agenda, more panic-based turbulence is likely in the coming months.

Fed Watch:

Target rate (in bps) possibilities, according to the CME Group (as of 04/17/2025 – 12:00 PM EST):

Market Review: Optimal Blue’s Production Metrics:

Home Price Expectations Survey – Fannie Mae:

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Data Distraction

‍Usually, last Wednesday’s stellar CPI numbers would have resulted in melting Treasury yields, but due to tariffs the report was utterly ignored. That said, M-o-M CPI fell 0.1%, the first decline since 6/24, and core CPI rose 0.1%, the smallest rise since 1/21. Y-o-Y, CPI and core rose 2.4% and 2.8% respectively. Moreover, the declines were breathtakingly broad-based. Absent tariff concerns, I bet the Fed would cut rates in May.

-Elliot F. Eisenberg, Ph.D., Economist

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News You Can Use:

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Interest rate and annual percentage rate (APR) are based on current market conditions as of 04/17/2025, 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 04/17/2025 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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