Mortgage rates will move slightly higher today on the back of a strong April employment report that makes the previously expected June Fed rate cut very unlikely, but a deterioration in the labor market is expected in coming months if trade policy doesn’t change. Employers added 177,000 jobs in April—more than expected by economists—with the unemployment rate remaining unchanged at 4.2%. It is much too early to see the employment effects of the new tariffs. The Bureau of Labor Statistics collected this data the week of April 6th, the same week President Trump instituted a 90-day pause on all reciprocal tariffs, other than those on China. Employers are unlikely to make major decisions until the details of any trade agreements with specific countries, especially China, are clear. But with the average tariff rate currently hovering in the low 20’s, up from 2.5% in January, the unemployment rate will increase in …

Mortgage-purchase applications are declining and pending home sales are sluggish. The 2025 spring homebuying season is lackluster, with record-high housing costs and widespread economic instability keeping would-be homebuyers at bay.  Mortgage-purchase applications are down 6% month over month, and Redfin’s Homebuyer Demand Index–a measure of tours and other buying services from Redfin agents–is essentially flat. Pending home sales fell, too, declining 2.8% year over year nationwide during the four weeks ending April 27. That dip is mainly due to a holiday effect–Easter fell into this year’s four-week period, but not in the comparable period in 2024–but even without that effect, pending sales would likely be flat from a year ago. Sales were sluggish last spring, and they’re sluggish again this spring.  There are two key reasons a lot of prospective house hunters are staying on the sidelines: Record-high housing costs. The median U.S. monthly housing payment is at an all-time …