May Real Estate Roundup: Market Outlook and Military Appreciation Month

There’s been a lot of news lately about the economy, and of course, mortgages are a big part of that. But I’m here to help you and your clients understand what’s going on and focus on the positives. Let’s take a look at two of the big stories – the Fed and tariffs. 

The Latest Fed News 

The Federal Reserve met again on May 7, and as expected, did not cut their base rate. Managing this rate is a way to keep inflation in check. Remember, this base rate is not a mortgage rate – it’s the rate U.S. banks charge each other to borrow money overnight. But that does trickle down to consumer products like credit cards and mortgages. The current thinking is no more rate cuts until possibly July because inflation actually has come down. 

President Trump had wanted Fed chief Jerome Powell to lower the base rate sooner, but Powell has held off, saying the president’s tariffs policies (more on those below) could raise inflation. For now, the discussion has been tabled while the new tariffs are on a 90-day pause until early July. 

As for mortgage rates, the new tariff policies have caused market volatility. Sometimes that can actually bring mortgage rates down, because when stock markets are uncertain, investors turn to bonds like the 10-Year Treasury bond, and the yield on those is tied closely to mortgage rates. 

Currently rates are still just under 7% - but we’re lower than where we were this time last year. It’s spring, buyer demand is still high, and home appreciation this year is expected to be around 4.5%. In other words, it’s still a good time to buy, and I have many solutions for even the most complex scenarios. Don’t listen to the noise – give me a call instead, and let’s find the best options for your buyers! 

Understanding Tariffs 

Tariffs are taxes on goods the U.S. imports from other countries. They’re intended to help generate revenue and lower federal debt. But higher tariffs can also mean economic decline and lower international demand for U.S. Treasury bonds to which mortgage rates are tied. 

President Trump sharply raised tariffs for countries like China, Mexico, and Canada as a way to stimulate revenue and lessen dependency on foreign companies. But U.S. businesses pay those tariffs, so they typically pass that cost on to consumers. This can trickle down to homebuyers in particular because of the imported materials like lumber, steel, appliance parts, and furnishings needed for a new home. 

So, what does this mean for mortgage rates? Right now, we’re in a wait-and-see period. But markets will always go up and down – a home is still one of the best long-term investments your clients can make. If we focus on what we can control, like managing credit wisely, utilizing down payment assistance, and lowering debt-to-income ratios, that’s how to turn your clients into homeowners. And I’m here to help every step of the way. 

Celebrating Military Appreciation Month 

Every May, we honor our nation’s military for their sacrifices. As a lender, I love to help service members and military Veterans with VA loans. Among other benefits, they come with rates typically lower than Conventional loans, no down payment, no mortgage insurance, and can be used again and again for qualified buyers (and spouses). Also, our VA Renovation loan limit is now $75,000 for non-structural repairs! 

Another benefit I offer that not all lenders can is e-closings. This is great for military on the move or stationed abroad (or any clients who prefer to sign some or all of their closing documents digitally). They can close from anywhere, completely online. It saves paperwork, time, and stress for everyone. 

I’m always just a call away if you or your clients need me!