Hi Friends, 

There’s a lot happening in the economy right now, and much of it is influencing mortgage rates, home affordability, and the confidence of buyers and sellers alike. If you’re trying to make sense of the headlines or just wondering if now is the right time to make a move, you’re not alone. Let’s break down what’s going on—in plain English—and what it could mean for your real estate goals.

Mortgage Rates: Volatile and Watching Inflation Closely

Mortgage rates made a brief dip last week, but they’re back up again as of today. What happened? The bond market, which heavily influences mortgage rates, is reacting to a combination of economic data and global trade tensions—particularly around new tariffs. When bond yields go up, mortgage rates follow.

There’s a lot of uncertainty right now, and markets don’t like that. With the Federal Reserve waiting for more signs of cooling inflation, we may not see rate cuts until later this year.

The Fed & Inflation Reports to Watch This Week:

• Fed Meeting Minutes (Wednesday): Investors will look for clues about future rate cuts.

• Consumer Price Index (Thursday): If inflation is lower than expected, rate cuts could come sooner.

• Producer Price Index & Jobless Claims (Thursday/Friday): Both offer more insight into where the economy is headed.

Tariffs & Trade Tensions: A Wild Card for the Market

New tariffs have been announced on imports from countries like China, Japan, Canada, and the EU—some as high as 30%+. This is likely to raise prices on goods, materials, and even construction supplies, which could impact the cost of new homes.

Higher tariffs often lead to inflation, and inflation keeps mortgage rates elevated. This is one of the reasons rates have been bouncing around so much lately. It’s also why buyers and sellers are watching the news more closely than ever.

Goldman Sachs: Recession Risk Rising

Goldman Sachs recently issued a note titled "Countdown to Recession," warning of slower growth and tighter financial conditions heading into 2025. They now place the chance of a U.S. recession at 47%, up significantly from earlier in the year.

Why does that matter for real estate?

• Economic slowdowns often cool buyer activity.

• However, recessions typically lead to lower mortgage rates, which can make buying more attractive.

• Historically, home prices have held steady or grown in most recessions, except during the Great Recession of 2008.

Housing Market Snapshot

• New Home Costs: Tariffs could increase the cost of building materials, potentially raising new home prices by $9,000 or more. While that might not dramatically impact monthly payments, it’s something to consider.

• Mortgage Rate Swings: With so much economic uncertainty, rates may continue to swing in the short term. If you’re buying, stay pre-approved and ready to act when you see a favorable rate.

• Home Prices: While some markets are softening, home values remain strong in the Bay Area. Sellers may need to be more flexible on pricing, but buyers still face competition for well-prepped homes.

Inventory on the Rise

According to recent reports, housing inventory is up 28% year-over-year across the U.S. While we’re still below 2019 levels, it’s clear the market is becoming more balanced. Buyers may have more leverage in certain markets—especially in areas seeing a slowdown in new construction.

What Should You Do Right Now?

For Buyers: Stay flexible, stay informed, and be ready. If rates dip or inventory rises, you could find a great opportunity—especially with the right team guiding you.

For Sellers: Preparation is everything. Homes that are priced right and show well are still selling quickly. Our team specializes in making the process turnkey—from light updates and staging to full-service marketing. Hand us the keys, and we handle the rest.

Let’s Talk Strategy Whether you’re thinking about buying your first home, upgrading, or selling a property you’ve held for years, this market requires a smart strategy. We’re here to help you navigate it with confidence.

Reach out to schedule a personalized consultation. We’ll help you cut through the noise and focus on what matters most to you.