Hi Friends! 

As we approach the middle of 2025, this week is shaping up to be a critical one for the economy—and by extension, for the housing market. Several key economic reports and market events are on the calendar, each with the potential to move mortgage rates up or down. For buyers, these shifts matter deeply: lower rates can boost affordability, while higher rates can make monthly payments harder to swallow.

So what’s happening this week, and why does it matter for those looking to buy or sell real estate?

Let’s break it down.

A Week of Market-Moving Data

Mortgage rates are closely tied to bond yields, which are in turn affected by economic indicators like inflation, GDP growth, and job market strength. Here's a look at what’s on deck this week and why you should care.

Monday: Atlanta Fed’s GDPNow Update

The GDPNow model is a real-time estimate of GDP growth for the current quarter. As of this week, the model is forecasting a 3.8% growth rate, signaling persistent strength in the U.S. economy.

Why it matters:
A strong GDP reading suggests the economy is still expanding at a solid pace. While that’s good news broadly, it could also keep inflationary pressures elevated, leading to higher bond yields—and, consequently, higher mortgage rates. Slower growth, on the other hand, might ease pressure on rates.

Wednesday: Consumer Price Index (CPI)

This is arguably the most closely watched data point for financial markets right now. The CPI measures inflation at the consumer level.

Why it matters:
If the CPI report shows cooling inflation, it could cause bond yields to drop and mortgage rates to follow. However, if inflation comes in hotter than expected, rates could spike. This report has real-time impacts on rate locks, affordability, and homebuyer activity.

Wednesday: 10-Year Treasury Auction

The 10-Year Treasury Note is a benchmark for mortgage rates. Investors’ appetite for these bonds determines the yield.

Why it matters:
If demand is weak, the government will have to offer higher yields to attract buyers—translating to higher mortgage rates. Strong demand for Treasuries, on the other hand, helps keep yields (and rates) in check.

Thursday: Producer Price Index (PPI)

This index tracks inflation at the wholesale level and often foreshadows consumer price changes.

Why it matters:
If producers are paying more for goods and services, those costs could soon be passed to consumers. An unexpected jump in PPI could increase inflation expectations and put upward pressure on rates.

Friday: University of Michigan Inflation Expectations + Consumer Sentiment

These surveys give insight into how consumers view the economy and where they think inflation is headed.

Why it matters:
If people expect prices to keep rising, that can be self-fulfilling—and the Fed takes those expectations seriously. Consumer sentiment also gives us a pulse on confidence, which influences spending, saving, and yes—home buying.

Meanwhile, the Housing Market Is Quietly Shifting Toward Buyers

While the economy remains relatively strong, the housing market is showing early signs of a cool-down that could benefit buyers.

Inventory Is Rising

According to Redfin, active listings are up 14.4% year-over-year, and “months of supply” is sitting at 4 months—a key benchmark of a balanced market. More listings mean more choices and fewer bidding wars.

Fewer Over-Asks and Price Reductions Are Back

Homes are now selling for roughly 1% below list price, the biggest discount for this time of year since 2020. Only 28% of homes are selling above asking, compared to 32% last year.

New Listings Are Slowing

New listings were up just 6.3% year-over-year at the start of June—the slowest growth in three months. In 11 of the nation’s 50 largest metros, the number of new homes hitting the market actually declined. That shows sellers may be hesitating, unsure whether this is the right time to list.

Buyer Activity Is Softening

Pending sales are down 0.4% year-over-year and mortgage applications dropped 3% week-over-week, marking the slowest May for purchase activity since 2020.

What About the Job Market?

Jobs play a major role in buyer confidence—and while the labor market isn’t crashing, it’s showing signs of cooling:

• Job openings rose in April to 7.39 million, but many were concentrated in healthcare and professional sectors.

• The quit rate (a sign of worker confidence) is at its lowest in a decade.

• There’s now 1 job opening per unemployed person, down from 2 in 2022.

• Private employers added just 37,000 jobs in May, far below the expected 115,000.

Still, wages are rising. Current employees saw a 4.5% increase, while job switchers saw 7%. The unemployment rate remains relatively low at 4.2%.

Translation: The job market isn’t falling apart, but it’s cooling just enough to make the Fed (and investors) pay attention.

Home Prices Are Still Rising—But at a Slower Pace

Despite the shift toward buyers, home prices are not falling across the board.

• April saw a 0.6% increase in home values month-over-month.

• Annual gains are hovering around 2%, with firms like Cotality forecasting 4.3% appreciation over the next 12 months.

If you're a long-term homeowner, that’s good news. Even modest appreciation can build significant wealth. For example, a $500,000 home gaining 4% in a year translates to $20,000 in equity—a huge return compared to renting.

Bottom Line: Opportunity for Strategic Buyers

If you’re secure in your job and financially ready, now could be a very smart time to buy:

• More inventory + fewer buyers = better negotiating power

• Price reductions and below-list sales are increasingly common

• Seller concessions and closing cost credits are back on the table

• You’re less likely to be caught in a bidding war

While mortgage rates remain elevated, today's buyers have more leverage and more breathing room. If you plan to stay in your home for several years, you can always refinance later when rates fall—but the price you lock in today might be your biggest advantage.