Portland Mortgage Market Update — May 16, 2025

It was inflation week, and it is interesting to see how the market will react in these post-tariff times. This month's reports likely gathered their information from the week after "Liberation Day", so the full tariff impact is not likely showing up yet. That being said, both the CPI and PPI came in at or below expectations. There were a couple hiccups for each that are worth noting. For the CPI, the Owner's Equivalent Rent (what homeowners think they could rent their home out for) came in way higher than reality and accounted of a full .1% increase in the CPI report. For the PPI- while April's came in lower than expected there was a massive upwards adjustment for March's report which raises questions/concerns about the reliability of the report. The market took some time to digest this info but ultimately rates improved on the numbers beat.

Then Powell spoke yesterday and indicated that we are in for higher rates for the long haul. He cited concerns about "entering a period of more frequent, and potentially more persistent supply shocks", presumably as a result of the tariffs, which could help bolster inflation despite the Fed keeping their interest rate higher. He acknowledged that the economy environment has changed since the Fed last held a strategy meeting in 2020 (no duh), and the market is still anticipating the Fed hold rates where they currently are at their next meeting in June. Despite this doom and gloom, rates held their gains earned from the inflation reports and ended Thursday about 1/2 discount point better than where they started, and continued their gains today on reports of Japan's worsening GDP.

New product alert! You may have noticed an email from me earlier this week about the "Dreambuilder" loan program. This has the potential to be a HUGE opportunity for clients that might not otherwise qualify for "normal" financing. Think low credit scores, less than 2 yrs of self-employment/spotty employment history, DACA/ITIN borrowers, or anyone else who might be just outside the box of qualifying. Better yet, this is an FHA-based product so they just need 3.5% down! If you know anyone who was recently denied a loan or thinks they need to wait a bit to get into a better position, have them call me!