This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.
Market Commentary:
Mortgage rates moved higher during the week of May 22–28 as bond markets reacted to stubborn inflation, rising oil prices, and renewed geopolitical tension. The 30‑year fixed rate climbed into the mid‑6% range, reversing the brief affordability improvement seen earlier in the spring. The Federal Reserve’s tone also turned more hawkish, with new Chair Kevin Warsh signaling that rate cuts are unlikely in the near term and that additional tightening remains possible if inflation doesn’t cool. Together, these factors kept upward pressure on borrowing costs across conventional, FHA,VA, and jumbo products.
Despite the rate volatility, the housing market showed pockets of resilience. New listings and contract signings continued to improve, especially in markets where sellers are pricing realistically. Pending home sales rose on both a monthly and annual basis, and softer home prices in some regions helped bring down average down payments. Still, rising rates are once again squeezing affordability, making strategic pricing and early rate‑lock conversations essential as summer activity ramps up.
FedWatch: Target rate (in bps) possibilities, according to the CME Group (as of 05/28/2026 – 12:00 PM EST):
Understanding the Relationship Between Land and Home Value
Population Could Be Halved by 2064, but Housing Is a More Immediate Threat
Builders Breaking Ground at Fastest Pace in 2 Years
Northeast and Midwest housing markets are the tightest heading into summer 2026 - Fast Company
Memorial Memory
While Memorial Day is now all about cookouts and travel, it’s the national holiday honoring military personnel who died defending our freedom; Veterans Day honors all who’ve served. Memorial Day was first recognized as “Decoration Day” in 1868, shortly after the Civil War. In 1971, it was formally made the last Monday in May. Spend at least a moment giving thanks to those who gave their lives. - Elliot Eisenberg, Economist
News You Can Use:
· Fed's Kashkari: The Fed could embark on a series of hikes in response to inflation.
· S&P/Case Schiller Home index for March -0.2% vs 0.1 estimate. YoY 0.8% vs 1.0% est
· 'Borderline Desperate' Buyers Are Winning Bidding Wars but Risking Deals Over Low Appraisals
· The Relationship Trend That Could Secretly Complicate Your Mortgage Approval
· U.S. House Prices Rise 1.7 Percent Year over Year; Up 0.5 percent Quarter over Quarter
· Housing market won’t be affordable for at least 7 years: Report
· US home prices rise as Midwest surges and Sunbelt cools
· States With the Lowest Property Tax Bills Ranked by Affordability
· Flood of AI Cash Is Forcing Bay Area Homebuyers To Boost Down Payments To Compete
· Miami Dominates, Los Angeles Fades, and Canadian Buyers Cautiously Return to U.S. Housing Market
*Communication is intended for Industry Professionals only and not intended for Consumer Distribution
Interest rate and annual percentage rate (APR) are based on current market conditions as of 05/28/2026, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by HomeServices Lending, LLC. Not available in all states. Rate is as of 05/28/2026 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac’s economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac’s business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.
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