Mortgage rates decreased another seven basis points according to the Freddie Mac Primary Mortgage Market Survey released on April 23rd. This is now a total of twenty-three basis points over the past three weeks. Said differently, of the 48-basis point run-up in rates during March and early April, we have now gained back roughly half of that increase. At a broader level, rates currently stand at their lowest level in the last three spring homebuying seasons. This improvement, coupled with a pickup in purchase applications and refinance activity, as well as an increase in monthly pending home sales, underscores signs of improving momentum in the market.
Mortgage applications increased 7.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending April 17th. “Mortgage rates declined last week as financial markets responded positively to the Middle East ceasefire and the lower trend in oil prices,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “Refinance application volume increased by 6 percent, while purchase application volume increased an even stronger 10 percent and was up 14 percent compared to last year’s pace. This increase was led by conventional purchase loans up 11 percent over the week. Despite the geopolitical uncertainty, housing demand is being supported by a still resilient job market, and homebuyers are experiencing a buyer’s market in most of the country given the higher levels of inventory relative to last year.”
U.S. retail sales increased more than expected in March as the war with Iran boosted gasoline prices and led to a record surge in receipts at service stations, while tax refunds underpinned spending elsewhere. The Commerce Department’s Census Bureau said retail sales jumped 1.7% last month, the largest rise since March 2025. Though higher prices largely accounted for the biggest gain in sales in a year, the report prompted economists to upgrade their economic growth estimates for the first quarter. The U.S.-Israel war with Iran is, however, casting a shadow over the economic outlook. Economists expected a considerable slowdown in growth this quarter as the tailwind from tax refunds fades and more expensive gasoline pulls spending away from other categories. “Households remain resilient for now, potentially leaning on tax refunds and broader savings to keep on spending in the face of the latest price squeeze,” said James McCann, senior economist for investment strategy at Edward Jones.
The number of Americans filing claims for unemployment benefits edged up last week, pointing to continued labor market stability in April, though economic uncertainty and higher prices stemming from the U.S.-Israeli war with Iran pose downside risks. Initial claims for state unemployment benefits rose by 6,000 to a seasonally adjusted 214,000 for the week ended April 18th. The absence of widespread layoffs suggested by the Labor Department’s report on Thursday supports financial market expectations that the Federal Reserve will probably not cut interest rates this year as the nearly two-month conflict fans inflation and strains the global economy. “The labor market has become more vulnerable since the start of the war, but the claims data over the last two months show no evidence of cracks,” said Nancy Vanden Houten, lead U.S. economist at Oxford Economics. “However, it’s always been our expectation that the spike in oil prices would take some time to become apparent in the labor market data.”
