3 Min. Market Summary
05/29/2026

Reminder: With rates still elevated, many lenders are using discount points and higher fees to advertise lower rates. That can make the financing look better than it really is. The rates in my update do not include origination fees or rate buydowns, so you’re seeing a more straightforward comparison. Now onto this week’s rate moving news.

Mortgage rates got a little relief this week as investors weighed softer economic growth data against inflation that remained elevated but came in largely as expected.

While annual inflation readings moved slightly higher, the data didn’t show signs of inflation accelerating beyond forecasts, which helped the bond market respond positively.

Investors were also encouraged by reports that the U.S. and Iran may be moving closer to a preliminary agreement that could reopen the Strait of Hormuz, easing pressure on global oil supplies and reducing future inflation concerns. While the details remain uncertain and headlines shifted throughout the week, lower oil prices and softer economic data helped bond yields improve and gave mortgage rates some support.

Looking ahead, next week’s labor market reports will be closely watched for more clues on the economy’s direction and what it could mean for future Federal Reserve policy.

Keep reading for a full breakdown of this week’s market-moving news:

Labor Market (Jobs)

• ADP Employment Data
  • Weekly employment trends averaged about 36,000 jobs created per week over the prior four weeks.
  • The data suggests hiring activity may be stabilizing after earlier weakness and points to monthly job growth around 154,000.
• Initial Jobless Claims
  • New unemployment claims rose modestly to 215,000.
  • Continuing claims increased slightly to 1.79 million.
  • Claims remain relatively low, though labor market conditions continue to be closely monitored.

Inflation

• Personal Consumption Expenditures (PCE)
  • Headline PCE inflation increased 0.4% for the month and rose from 3.5% to 3.8% year over year.
  • Core PCE increased 0.2% for the month and rose from 3.2% to 3.3% year over year.
  • Monthly inflation readings came in slightly cooler than expected, helping support bonds despite higher annual inflation figures.
• Apartment List Rental Report
  • Rents increased 0.5% in May, which is typical for the season.
  • Rental prices remain down 1.5% from a year ago.
  • Elevated vacancy rates continue to support slower shelter inflation trends.

Economic Reports and Forecasts

• Gross Domestic Product (GDP)
  • First quarter GDP was revised down from 2.0% to 1.6%.
  • The report suggests economic growth was slowing even before the full impact of higher energy prices.
• Durable Goods Orders
  • Headline orders rose 7.9%, boosted by aircraft purchases.
  • Core orders excluding defense and aircraft fell 1.1%, signaling softer business investment activity.
• Case-Shiller and Federal Housing Finance Agency (FHFA) Home Prices
  • Home price appreciation remained positive but modest.
  • Case-Shiller showed annual appreciation near 1%.
  • FHFA reported annual appreciation near 2%.
• Fannie Mae Home Price Expectations Survey
  • Economists forecast 2.5% national home price appreciation over the next year.
  • Cumulative appreciation is projected at roughly 14% over the next five years.
• New Home Sales
  • New home sales fell 6.2% in April and prior month data was revised lower.
  • Inventory remains limited and home prices continue to show modest appreciation.

Federal Reserve and Monetary Policy

• Federal Reserve Leadership
  • Markets focused on the swearing in of Federal Reserve Chair Kevin Warsh.
  • Investors are watching closely for signals regarding inflation and future policy direction.
• Inflation and Rate Expectations
  • Cooler monthly PCE readings and slower economic growth helped improve sentiment in the bond market.
  • Markets continue to evaluate whether slowing growth and easing inflation pressures could eventually support lower rates.

Other

• Iran Negotiations and Oil Markets
  • The dominant market story this week was the back-and-forth surrounding a possible U.S.-Iran agreement.
  • Reports alternated between optimism about reopening the Strait of Hormuz and renewed military tensions.
  • Oil prices generally moved lower on hopes of increased supply, helping bond yields improve and supporting mortgage pricing.
• Treasury Supply Concerns
  • The administration’s tariff refund process may require additional Treasury issuance.
  • Increased bond supply could create future pressure on the bond market.