After three straight weekly declines, the 30-year fixed mortgage rate edged back up to 6.30% in Freddie Mac's latest survey, up from 6.23% but still well below the 6.76% of a year ago. The 15-year fixed rose to 5.64%. Even with the small bump, Freddie Mac reported purchase applications running more than 20% above last year, evidence that buyers are responding to both lower rates and more homes to choose from. That is certainly what our team is seeing across Sevier and Sanpete counties.
The Fed Holds, But Not Quietly
The Federal Reserve kept its benchmark rate at 3.50%-3.75% on Wednesday, the third consecutive hold, in what is expected to be Jerome Powell's final meeting as chair. The vote was 8-4, the most dissents since 1992. Governor Stephen Miran wanted a quarter-point cut, while three regional presidents objected to keeping an easing bias in the statement. The committee said the war in the Middle East is contributing to a high level of uncertainty and that inflation is elevated because of energy prices. Powell also said he intends to remain on the Board after his term as chair ends, following the Senate Banking Committee's vote to advance Kevin Warsh's nomination.
Bottom line for borrowers: the Fed is split, but nobody is talking about hikes. Markets now put very low odds on a June cut, so mortgage rates will keep taking their cues from oil and inflation data rather than from Fed action.
Growth, Inflation and Oil
The first estimate of first-quarter GDP showed the economy growing at a 2.0% annual rate, a rebound from 0.5% in the fourth quarter but a bit under the 2.3% economists expected. Consumer spending, exports and business investment all contributed. Inflation was the sore spot: the PCE price index, the Fed's preferred gauge, rose 0.7% in March and 3.5% from a year earlier, with core PCE at 3.2%. Personal income grew a healthy 0.6% for the month.
Oil made the week harder. Brent crude spiked to $118 on Wednesday after the administration threatened to blockade the Strait of Hormuz until a nuclear deal is reached, then touched $126, a four-year high, on Thursday before pulling back. U.S. crude finished the week above $105, and the ceasefire looked shakier by Friday. That energy volatility is the single biggest reason rates ticked up.
Housing Data Roundup
Three housing reports landed this week. The S&P Cotality Case-Shiller index showed national home prices up just 0.7% year over year in February, with more than half of major metros posting annual declines; Denver was the weakest at -2.2%. The delayed March housing starts report showed builders breaking ground at a 1.5 million annual pace, but permits fell 10.8% to 1.37 million, a caution flag for future supply. Meanwhile, consumer sentiment finished April at 49.8, near record lows, as gas prices weighed on households.
What This Means for Central Utah
The national price picture, with values barely rising and some big-city metros falling, looks nothing like ours. Central Utah never saw the speculative run-up that Denver or Phoenix did, so we do not have as far to fall, and our year-to-date Sevier County median is actually up double digits on strong sales volume. That relative stability is a real advantage when you are talking with an appraiser or a lender.
For buyers, the message this week is to stay steady. Rates in the 6.2%-6.4% range are the new normal until the energy situation resolves, and waiting for something dramatically better could cost you the house you want. USDA zero-down loans remain available throughout Richfield, Monroe, Salina, Manti, Ephraim, Nephi, Delta and Loa, and rural buyers should also ask about Utah Housing Corporation down-payment assistance. For sellers, falling permits and tight new construction in our valleys mean your resale home faces less competition from builders than it would along the Wasatch Front. Pair that with a sharp price and good photos, and May is shaping up as a solid month to list. As always, our team is happy to walk you through the numbers for your specific property.