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Nathan Laine/Bloomberg WASHINGTON — Elon Musk is leaving the Trump administration after guiding some of President Donald Trump's most radical attempts to dissolve government agencies, including efforts to greatly diminish the headcount at the Consumer Financial Protection Bureau. Musk's time in Washington has been fraught with uncertainty, including the extent to which he is responsible for the vast gutting of government services. President Trump has widely credited Musk as the head of DOGE and credited him as the driving force behind the agency's work; the Justice Department has maintained that he was merely a special government employee and not in charge of DOGE. But that designation brings with it limits on how long such an employee can work for the federal government. Musk's departure comes as he has recently criticized the forthcoming spending and taxation bill — which Trump and Congress have dubbed the "big, beautiful bill" — as too expensive, saying that it "undermines the work that the DOGE team is doing." "I was disappointed to see the massive spending bill, frankly," Musk said in the interview with CBS Sunday Morning. Some of that work includes the attempted dismantling of the CFPB. Trump-appointed leadership of the CFPB, including DOGE attachés to the bureau, plans to fire nearly all of the bureau's employees, leaving only around 200 people. The DC Circuit Court is currently considering the legality of a lower court injunction against the administration's efforts to fire wide swaths of the CFPB workforce.Musk's exit comes as the banking industry grapples with the regulatory uncertainty created by DOGE's assault on financial oversight. While enforcement at the CFPB has been curtailed, many consumer protection laws remain within its jurisdiction, leaving questions about whether those oversight duties will continue to be performed. Musk's DOGE operatives have been operating at the CFPB since February, and potentially have access to sensitive data on consumers and companies overseen by the bureau — including potential competitors to Musk's X social media platform, which he is planning to turn into a payments platform. DOGE and Musk's interest in the CFPB, and their attempts to shutter it, come months after the bureau finalized a rule expanding its supervisory authority to include digital payments apps. "The ethical issue doesn't go away [with Musk's departure] because the Trump Administration continues to view control over federal agencies and contracting as a license to do 'favors' for its friends in industry and finance — like Mr. Musk," said Todd Baker, senior fellow at the Richman Center for Business, Law & Public Policy at Columbia University. "But the legal basis for complaint against any future actions by the Trump CFPB involving X or his other vehicles does diminish once he is no longer part of the DOGE teams that have access to CFPB systems and data." While the CFPB has been DOGE's biggest target in the banking world, the group has targeted agencies across the financial services spectrum. DOGE has also interacted with the Federal Deposit Insurance Corp. — already short bank examiners — to develop plans to restructure the agency. At one point, the Trump administration reportedly mulled combining bank regulators including the FDIC, the bank regulatory functions of the Federal Reserve and Office of the Comptroller of the Currency into the Treasury Department as part of the broader government downsizing effort, though Treasury Secretary Scott Bessent has downplayed that effort. The FDIC told employees last month that it will reduce its workforce by about 1,250 in the coming months. The Office of the Comptroller of the Currency and National Credit Union Administration have also announced cuts to their workforces in recent months. DOGE's actions have drawn legal challenges beyond the CFPB. A federal judge blocked DOGE's access to a Treasury payment system known as the Bureau of Fiscal Services — which is used to distribute trillions of dollars in federal payments annually — in February. The Treasury's Office of Inspector General and Government Accountability Office have also launched investigations into DOGE's access to the Treasury payment systems and other databases.  Musk's future role in the administration is unclear. His companies — including X, space flight firm SpaceX and electric automaker Tesla, among others — have massive and growing contracts with the federal government, and he could continue to informally advise the president.

Mortgage rates rose for the third consecutive week, and are now at their highest level since the start of February, the Freddie Mac Primary Mortgage Market Survey reported.The 30-year fixed-rate mortgage averaged 6.89% on May 29, up 3 basis points from last week when it was 6.86%, but below one year ago at this time, at 7.03%.Meanwhile, the 15-year FRM averaged 6.03% versus 6.01% on May 22 and 6.36% on May 30, 2024. "While the movement isn't drastic, it adds to the growing sense that higher borrowing costs may be sticking around longer than many hoped," Samir Dedhia, CEO of One Real Mortgage, said in a comment..Other indicators diverged, including the benchmark 10-year Treasury yield which backed off of recent peaks.The 10-year Treasury, which closed near 4.6% on May 21, was at 4.45% at 11 a.m. on May 29.What drove mortgage rates this week"Mortgage rates stabilized over the last few days, but at higher levels," said Kara Ng, senior economist at Zillow Home Loans in a Wednesday evening statement."Bond yields — and the mortgage rates that tend to follow them — remain elevated, thanks to ongoing concerns over budget deficits and tariffs," Ng said. "Despite the upward pressure over recent weeks, mortgage rates are still lower than they were a year ago."Dedhia agreed with Ng's comments about deficits and tariffs impacting Treasury prices. "With uncertainty around how these policies will affect the broader economy, investors are pushing yields on Treasury bonds higher, and mortgage rates are following suit. Without a clear signal from the Fed or a shift in inflation data, rates could remain volatile in the weeks ahead."What other rate trackers are reportingZillow's rate tracker had the 30-year FRM at 7.08% at that time, unchanged from the previous week's average but up 3 basis points on the day.On the other hand, Optimal Blue had the conforming 30-year FRM at 6.874% as of May 28, down from 6.925% seven days earlier.Lender Price data posted on the National Mortgage News website found the 30-year back under 7%, at 6.982%, compared with 7.015% one week earlier.The Mortgage Bankers Association's Weekly Application Survey also increased last week to move near 7%, with the conforming 30-year FRM at 6.98%."Mortgage rates increased for the third straight week, pushed higher by continuing volatility in the financial markets," Bob Broeksmit, MBA president and CEO said in a Thursday morning statement. These higher mortgage rates dampened borrower demand,,,despite the weaker activity, the purchase market is on more solid footing than it was a year ago, with applications up 18%."Freddie Mac Chief Economist Sam Khater had a helpful hint for consumers: "Aspiring buyers should remember to shop around for the best mortgage rate, as they can potentially save thousands of dollars by getting multiple quotes."How Pres. Trump's GSE post affected ratesIn a May 28 commentary, the primary-secondary spread tightened to about 150 basis points following social media posts from Pres. Trump stating the government guarantee for agency mortgage-backed securities would remain when Fannie Mae and Freddie Mac are privatized, wrote Eric Hagen, an analyst with BTIG."We've treated the guarantee as being necessary for supporting both market conditions and value in the Enterprises, but hearing it reiterated still helps trim some risk of a policy miscommunication error which sends MBS spreads and mortgage rates higher as we get closer to an IPO," Hagen said.

This morning, the National Association of Realtors (NAR) reported that pending home sales dropped 6.3% in April from a month earlier.They were also 2.5% lower than levels seen at the same time last year, dampening any hope of 2025 being a comeback year for home sales.The culprit? High mortgage rates. You can argue they aren’t that high historically, but they remain much higher than a few years ago.And they increased from levels seen in March, taking the wind out of the housing market’s sails during the critical spring buying session.As such, existing home sales will likely see soft prints in future releases (though a bump higher might be expected for May based on the lower rates seen in February and March).It’s All About Mortgage RatesWe can argue until the cows come home, that it’s high home prices not high mortgage rates, but the data continues to make the argument it’s the latter (see chart above from MND)Even NAR chief economist Lawrence Yun said, “At this critical stage of the housing market, it is all about mortgage rates.”He added that “lower mortgage rates are essential to bring home buyers back into the housing market.”I tend to agree with him here (though I don’t always agree with him). At the same time, I’ve acknowledged that home prices are “high” too.Problem is, home prices are sticky and even if they do ease somewhat, which they probably will, the impact isn’t as beneficial.For example, a 1% drop in mortgage rates is equal to roughly an 11% drop in home prices. So you really need prices to dump to boost purchasing power.Alternatively, you get a nice drop in mortgage rates and prospective home buyers can afford a lot more home.This also explains why home builders lean so heavily on mortgage rate buydowns. They could lower the price, which some do, but lowering the interest rate is much more effective.So whether home prices are too high or not is moot here. To bring in more buyers, we need lower mortgage rates.And near-7% rates simply won’t do. Yet if and when rates hover closer to the 6% mark, it seems buyers perk up and dip their toes again.So we’re not actually that far off here, we just need clarity on the tariffs, trade war, and government spending bill so yields can come down and rates can ease.Gen-Z and Millennials Are Delaying Home Purchases Because of High Mortgage RatesNow I present to you some data to back up the idea that it’s mortgage rates, not home prices.A new May 2025 survey from Realtor.com found that “persistently high mortgage rates continue to limit buyer activity.”Senior economic research analyst Hannah Jones noted that about one-third of respondents indicated that they’ve delayed a home purchase because of “still-high rates.”And it’s even more prevalent among key home buying cohorts, including Millennials and Gen-Z generations.Some 55% of Gen-Z respondents strongly agreed or simply agreed that they’ve delayed a home purchase due to high mortgage rates.The same was true for 47% of Millennials, which has been the biggest cohort of home buyers for much of the past decade.This might also explain why Boomers overtook them recently as the largest share of home buyers.Despite this, they still want to buy a home, with 23% of Millennials saying so this year, compared with only 15% last September.So perhaps they’re also getting over the fact that mortgage rates are high, and/or becoming more comfortable with the new normal for mortgage rates.But it does tell you that if and when rates come back down closer to 6%, we could see a big uptick in home purchases.The one caveat is if rates only return to those levels due to a wobbly economy, that could offset any expected home buyer demand.After all, you need a job if you want a mortgage, so if rising unemployment is the reason for falling mortgage rates, we might have a problem. Before creating this site, I worked as an account executive for a wholesale mortgage lender in Los Angeles. My hands-on experience in the early 2000s inspired me to begin writing about mortgages 19 years ago to help prospective (and existing) home buyers better navigate the home loan process. Follow me on X for hot takes.Latest posts by Colin Robertson (see all)

Pending sales of previously owned US homes last month fell by the most since September 2022, illustrating a disappointing spring selling season as prospective buyers balk at high asking prices and borrowing costs. READ MORE: Spring housing outlook: not all bad newsAn index of contract signings dropped 6.3% in April to 71.3, according to National Association of Realtors data issued Thursday. The decline was steeper than all estimates in a Bloomberg survey of economists. Pending sales in the West also fell by the most in more than two and a half years. The disappointing figures suggest the resale market will continue to trudge along until prices come off their record levels and mortgage rates settle somewhere closer to 6% than the current 7%. While more homeowners are listing their homes, others are waiting for cheaper financing options. Underscoring that, NAR Chief Economist Lawrence Yun said the market currently is "all about mortgage rates."READ MORE: Tariff fears drive April auto, mortgage borrowing"Despite an increase in housing inventory, we are not seeing higher home sales," Yun said in a statement. "Lower mortgage rates are essential to bring home buyers back into the housing market."Pending sales in the South, the biggest home-selling region, fell 7.7%. Contract signings decreased 8.9% in the West and 5% in the Midwest.READ MORE: Condos losing appeal among real estate investorsGains in contract signings in February and March were a bit of a head fake for the crucial spring season. Historically, a pickup in contract signings is followed by a rise in closings that typically occur a month or two later. However, that relationship "has loosened in recent months," according to a Bloomberg Economics note last week. The share of existing-home sales that were canceled in the three months through April rose to 7%, the highest since January 2024, Yun said last week on a call with reporters.

Experts are weighing the future of mortgage rates and guarantee fees following the Trump administration's strong yet mixed messaging on the future of Fannie Mae and Freddie Mac.President Trump in a Truth Social post Tuesday said he's working on taking the government-sponsored enterprises public, stating they would retain their "implicit guarantees," and that he would oversee the companies. It was the clearest statement yet from the administration on the GSEs' future, but larger questions remain. Federal Housing Finance Agency Director Bill Pulte in a CNBC interview Wednesday suggested Trump had more power over the situation than in his first term, as he can now hire, and fire, the FHFA leader. He also said the GSE reform Trump pursues might not be in line with the general speculation there has been about it."The president has not said anything that he wants to end conservatorship. We're studying actually potentially keeping it in conservatorship and taking it public," said Pulte. "However this would be entirely up to the president. He is essentially the conservator." Pulte, who declined to share his own conservatorship recommendation said, "Whether the president decides to sell a small piece or what have you" is entirely up to Trump.Experts who spoke to National Mortgage News Wednesday were puzzled by Pulte's comments."The major problem with that is, with the entities being in conservatorship, they can't raise capital," Ed Groshans, senior policy analyst at Compass Point Research and Trading, "So I still don't understand how that would function."The implicit guarantee mention, however, gave industry experts fuel for speculation around mortgage rates and guarantee fees. Unlike Ginnie Mae, which securitizes its loans with the full explicit backing of the U.S. government, Fannie Mae and Freddie Mac's support from the government historically was implicit. That changed with the government establishing direct ties to the GSEs to prevent them from failing during the Great Financial Crisis.How could lenders and borrowers be impacted by the change to the GSEs?Some industry stakeholders, acknowledging a lack of specifics from the administration, said a conservatorship exit could create upward pressure on rates. "Exiting … could potentially harm mortgage rates through increased guarantee fees, uncertainty around the implicit guarantee, or changes in the GSEs' structure and operations," said Jason Obradovich, chief investment officer at New American Funding, in emailed comments. Borrowers could also face higher interest rates due to smaller GSE credit boxes that would mean they buy fewer loans, resulting in more mortgages losing the benefit of the guarantee and experiencing less favorable pricing, he added.A separate capital markets analyst who declined to be identified said the fees lenders pay for the guarantee are likely to rise as they're an easy mechanism to use to generate money from the GSEs. Such a move would nudge rates up as lenders would need to charge consumers higher prices for loans to cover the g-fees."The irony is that Trump is all about lower interest rates and lower mortgage rates," the analyst said. "So you can't have your cake and eat it too, so we're waiting for that."The Urban Institute earlier this year also predicted g-fees could rise 10 basis points to 25 basis points in an exit scenario.Meanwhile, mortgage rates also could rise if the Trump administration failed to back a guarantee considered to be as strong as the one the market is currently pricing in, experts noted. Others rejected concerns that guarantee fees or mortgage rates would shoot up. At his confirmation hearing in February, Pulte told lawmakers any conservatorship exit should be done carefully to avoid pressuring interest rates. "If they can do this with the guarantee remaining in place, then it really should not impact mortgage rates," said Bose George, an analyst at Keefe, Bruyette and Woods. Groshan also said he expects mortgage rates to remain stable based on an analysis of the spreads of GSE mortgage-backed securities to the 10-year Treasury from the time they entered conservatorship to today."Any removing them from conservatorship will not have a material impact, any upward impact on mortgage rates," he said. "The caveat there being is that the line of credit that the GSEs have with the Treasury must stay in place."The investor outlook and a timeline for releaseStock analysts were hesitant to predict the amount of money the GSEs would raise in any public offering. Administration officials have also not made specific plans for the Treasury's senior preferred holdings. "While we would expect the shares to respond positively, we continue to think that the common shares have significant dilution risk if the GSEs were to be privatized and we see meaningful downside risk," wrote George in a flash note earlier Wednesday. Following Trump's post, Fannie Mae stock rose 2% Wednesday to close at $10.78 per share, while Freddie Mac's share price climbed 5% to $8.00 per share. Separately, BTIG analysts in a report Wednesday afternoon also said they increasingly expect to see a trickle-down effect from a GSE listing for the mortgage finance industry. "It would likely expand the base of inventors paying attention to the (financial institutions group) space, and raise awareness for the ecosystem of stocks and issuers which are inherently linked to the GSEs," wrote BTIG.Predictions regarding the timeline of an exit have varied significantly; former Freddie Mac CEO Don Layton recently theorized the GSEs would remain in limbo through 2028. Given Trump's two social media posts on the topic in a short time frame experts were particularly bullish. One capital markets analyst who did not wish to be identified predicted a GSE conservatorship exit before the 2026 midterm elections. Groshans, stating greater than 80% odds Trump will release Fannie and Freddie, offered a 2027 guess. "Barring any exogenous event like COVID, China, attacking Taiwan, or something like that, they have a good runway here," he said. "They have a good team, and I think that that is a very good shot that they're going to get it done this time."

While real estate investment purchases are falling into more stable patterns following wild pandemic-era swings, condo activity is lagging, falling to a 10-year low, according to Redfin.U.S. investors bought a total of 46,726 units in the first quarter, up 2% year over year, the real estate brokerage reported. Early 2025 activity recovered from the 3.9% drop in the fourth quarter of 2024. In the past 12 months, investment purchases have increased or shrunk by less than 4% in each direction, compared to the wide  fluctuations between 2021 and 2023, as investors tried to take advantage of low interest rates in a hot housing market. "While some investors are still making money by flipping homes or renting them out, particularly in parts of the U.S. where rents are still rising, many of the investors who jumped into the market in 2021 or 2022 have backed off," Redfin senior economist Sheharyar Bokhari said in a press release. Numbers today are instead now similar to pre-pandemic volumes. "Investor home purchases have leveled off because rapid sale-price and rent growth is no longer the norm," Bokhari noted. The investment community bought approximately 19% of homes sold in the first quarter, on par with year-ago levels and up from 18% in the first three months of 2024.In March, fix-and-flip entrepreneurs and businesses earned a net profit of $182,980 for each home they sold, with gains increasing 2.8% from a year earlier. Six percent of homes sold for a loss, compared to 5% 12 months earlier.  For-sale homes listed by investors made up 8.4% of the total housing market in March, tumbling to an almost two-year low from the 8.9% share one year prior. What's causing condo purchases to plungeAlthough purchase volume returned to positive territory at the start of the year, investors bought the fewest number of condos in 10 years, with the exception of COVID-impacted 2020, Redfin said. Concerns over depreciating condo values drove investor purchases downward to just 8,509 units in the first quarter. Transactions dropped 3% year over year. Redfin's research previously determined 68% of the overall number of condos sold to start 2025 went for below list price, the highest percentage in five years. Florida's rising housing costs are causing much of the condominium downturn, with extreme weather leading insurance costs and homeowners' association fees to surge, according to Redfin. Beachfront condo developments also make those particular properties vulnerable to natural disasters and raise their potential to land on a Fannie Mae blacklist. HOA fees are behind soft condo sales elsewhere in the country as well, as investors are finding them difficult to rent. "People who own condos as rentals are trying to offload them because the money no longer makes sense. And people aren't buying condos to rent them out anymore unless they have cash to burn," said Stuart Naranch, a Redfin agent based in Washington, D.C.Why Florida's condo market is seeing the most declineBut whether its condominium units or other property types, nowhere is the investor pullback felt more acutely than in the Sunshine State, Redfin's researchers said. Of the five metropolitan markets registering the largest pullback in investment purchase activity, three were located in Florida, with Miami seeing a 19% annual drop to lead the U.S. Still, Miami investors hold the largest investor market share of any major U.S. city, buying 30% of properties for sale in the first quarter. Orlando landed in the second spot with a 13% year-over-year decline. Following just behind were Warren, Michigan, and Columbus, Ohio, with similar 13% dropoffs, while Fort Lauderdale saw activity fall 12%.  Miami, Orlando and Fort Lauderdale have all reported annual decreases in buying activity for each quarter since mid 2022.  

Consumers are giving mixed messages on how they feel about the current home purchase market and this is likely feeding into the Spring season, a Bank of America report found.Among current homeowners and prospective buyers, 60% claim they are unable to tell whether now is a good time to purchase a home or not. The date comes from its Homebuyer Insights Report, a survey of 2,000 people, split evenly between the two groups and conducted between March 20 and April 22.This compares with 57% in last year's study and 48% in the 2023 report. The Fannie Mae Home Purchase Sentiment Index for April released on May 7 had 77% of consumers declaring it was a bad time to buy, with 23% saying it was a good time, unchanged from March. But 58% said it was a good time to sell, down from 64% in April.Why mortgage lenders should remain optimisticThe good news for lenders is that among prospective homebuyers surveyed by B of A, 52% said the market is better in 2025 than it was one year prior.In the 2024 study, 48% affirmatively answered the question if the market is better than one year prior, while in 2023, it was 38%. Furthermore, three-quarters of this group say they expect both home prices and mortgage rates to fall and are waiting until then to buy a home. This compared with 67% last year and 62% in 2023."With so many factors impacting the homebuying market, prospective buyers and current homeowners are left wondering what it all means for them," said Matt Vernon, head of consumer lending at Bank of America in a press release. "As our research shows, a majority of buyers feel the market is headed in the right direction, but many are still planning to wait for more favorable conditions before they decide to take action."The findings among consumers echo the sense of the industry during the recent Mortgage Bankers Association Secondary and Capital Markets Conference.During his discussion about the group's latest housing finance forecast, Chief Economist Mike Fratantoni commented "Nobody's feeling exuberant about the housing market right now or about the mortgage market, but it's a little better than these last couple years, which have been truly very difficult for a lot of our members."Why potential buyers are waiting on homeownershipAmong those that delayed their home purchase, 63% are waiting for lower prices; 50% are looking for rates to decline; while 38% want to increase their savings or income.But Americans in general are feeling less confident about their financial outlook than they did one year ago, the May WalletHub Economic Index found.The drop of 27% is the sharpest since December 2020, WalletHub in part attributed the magnitude of the decline to May 2024 being the most optimistic month for consumers when it comes to their financial outlook.Specifically, when it comes to real estate, interest in buying a home fell by nearly 30% year-over-year, the largest decrease since December 2020, WalletHub noted."People who have low financial confidence are likely to spend less money, make fewer large purchases, and pay down less debt than people with high confidence," Chip Lupo, WalletHub analyst, said in the report. "As a result, when consumer sentiment experiences a significant decrease, that is negative for the economy."How Gen Z is looking at buying a home in 2025Meanwhile, when looking specifically at Gen Z homebuyers and/or prospective owners, the Bank of America survey results show they have, or are willing to, make a financial stretch to achieve this goal.The share of Gen Z homeowners who took an extra job in order to obtain a down payment increased to 30% in this year's survey, from 28% in 2024 and 24% in 2023.Purchasing with a sibling increased to 22% among Gen Z owners, up from 12% last year and 4% two years ago.Meanwhile, among those looking to become homeowners, 21% of Gen Z said they plan to get their down payment using a loan from their parents or other family members, versus 15% of the general population at large.Among all potential buyers, going to the Bank of Mom and Dad to fund the down payment was up from 12% in 2024 and 9% in 2023."Even with the challenges they face, younger generations still understand the long-term value owning a home offers them and many are doing what it takes to get there," said Vernon. "They are finding creative ways to afford down payments and working hard to improve their financial futures."However, another sign of the financial challenges around homeownership faced by Gen Z and millennials is that 92% commented they do not live in their ideal area, versus 64% of baby boomers.What type of home Gen Z is able to buyGiven the financials involved with acquiring a home, Gen Z is more likely to have bought a fixer-upper and given the maintenance costs, as well as being more likely to be a do-it-yourself owner, is also the ones with highest rate of buyer's remorse, a survey from This Old House found.More than two-thirds, 69%, said they had regrets surrounding their home projects, including underestimating routine maintenance at 26%; buying a property which was too old, 21%; or not budgeting for unexpected repairs.The This Old House survey found that Gen Z is the most likely to take on debt to pay for upkeep, at 39%. They are also the ones to struggle the most with paying their property taxes, 31% and their mortgage, 29%.Still, over three-quarters of Gen Z homeowners plan to remain in their current home long-term and more than half said they still recommend becoming a homeowner.This Old House surveyed 2,000 homeowners across all generations to gain insights and outlook on repairs, maintenance and remodeling on Feb. 10 and 11.

The anticipated impact of tariffs pushed consumers toward big-ticket items in April, but overall borrowing levels also show them becoming more discerning in light of political developments, according to Vantagescore.Researchers noted earlier this year the likelihood of a bump in certain types of purchases before the implementation of various tariff measures proposed by President Trump. Evidence appeared notably in auto lending, but newly originated mortgages also saw an uptick. New auto originations increased to a nearly 1.8% share of consumers, up from the 1.4% level it held over the previous four months. The April rate was also higher than the 1.6% reported a year and in early 2020, immediately preceding the COVID-19 pandemic.  Mortgage originations edged up to 0.3% of consumers, rising from 0.2% on both a monthly and yearly basis. Sluggish sales activity has recent activity well below the 0.6% share in January 2020. "Economic uncertainty was a driver of consumer decisions across all age groups in April," said Susan Fahy, executive vice president and chief digital officer at Vantagescore, in a press release. "Buyers appear to have accelerated their car purchases in anticipation of higher sticker prices due to the recently implemented tariffs," she added. Auto and mortgage borrowing contributed to an increase in the newly originated credit rate overall to 5.8% in April, up from March's share of 5.1%, but just off from 5.9% reported 12 months earlier. While some of Trump's tariff proposals are on pause, others, including an across-the-board tax on steel and aluminum imports auto manufacturers and homebuilders often rely on, remain in place.  Despite the rise in originations, other data revealed borrowers becoming more "discerning" in their credit usage, Vantagescore said. Borrowing levels flattened overall, when all products, including revolving credit cards and personal loans, were factored in. Average credit balances rose by $14, or 0.01% compared to March. Balance-to-loan ratio, though, is on a downward trend in 2025, falling to 50.8% from 51.5% at the start of the year. What auto delinquency levels mean for the mortgage marketCredit distress across all types of loans and delinquency periods decreased month to month to just under 1% of total outstanding balances, indicating short-term improvement in repayment activity. The number, though, rose from 0.9% one year ago.  A more pronounced rise in early-stage auto loans appeared with the share overdue by 30 to 59 days rising to 2.2% from 1.9%. On the other hand, mortgage payments late by 30 days dropped off to 0.9% from 1%. The rise in early-stage auto delinquencies could portend emerging consumer distress if the trend holds. Borrowers' payment hierarchy have them prioritizing mortgage payments first when they encounter economic challenges, followed by auto loans, making any spike in the latter worth observation. "People definitely want to try to make their mortgage payments because the shelter is the first thing to make sure they have. Then, to get to work, they need that car," said Rikard Bandebo, chief strategy officer and chief economist at Vantagescore, in a recent interview. While mortgage distress is still low compared to pre-pandemic levels, it also is creeping upwards across credit-score tiers alongside auto delinquencies, Vantagescore researchers found. The growth in late-payment rates is not restricted to specific income levels either, Bandebo said. Borrowers with higher income see lower rates of distress as expected, "but the rate of increase in delinquencies was growing much more in high income," Bandebo said.   While counterintuitive, pandemic developments helped reshape the consumer landscape, he continued."It's really wealth that is the bigger proxy for who's doing well, because those that own assets, like homes or share portfolios or their own business, have seen the value of those assets disproportionately increase since COVID."The impact of student loan repayments stands to also drive delinquency rates upward. Late payments on student debt, which typically aren't reported until 90 days past due, began reappearing on credit reports this year, steeply accelerating the share of later-stage delinquent accounts. The overall rate of consumers with accounts  overdue by three months or more shot up this year, surpassing the share of 30-to-59 day delinquencies, Vantagescore said.  

Federal Reserve Federal Reserve officials were split about the potential inflationary impact of higher tariff rates during the central bank's monetary policy meeting last month.Some members of the Federal Open Market Committee voiced concern that elevated import taxes could result in supply-chain disruptions that lead to "persistent effects on inflation, reminiscent of such effects during the pandemic," according to minutes released Wednesday afternoon.Others believed the price-level impact of tariffs would be limited, pointing to a weakening U.S. economy, lower aggregate demand for goods as a result of the crackdown on immigration and "less tolerance for price increases by households." Some participants also expressed optimism that negotiations would lower the ultimate impact of the Trump administration's trade policies, even though the discussion — which took place on May 6 and 7 — pre-dated the U.S. trade deal announcement with the U.K. and the temporary pause on reciprocal tariffs with China. Still, anecdotal evidence shared during the meeting suggested that American companies were planning on increasing prices in response to the higher levies, even if their businesses were not directly affected by them."Many participants remarked that reports from their business contacts or surveys indicated that firms generally were planning to either partially or fully pass on tariff-related cost increases to consumers," the minutes note. "Several participants noted that firms not directly subject to tariffs might take the opportunity to increase their prices if other prices rise."Despite the divergent views about the ultimate impact of tariffs, the committee members were in broad agreement that the uncertain policy outlook presented risks to both price stability and the labor market. They also agreed that the Fed's target range for the federal funds rate — between 4.25% and 4.5% — was well-positioned to respond either way. Tariffs came up repeatedly during the meeting, which was the first gathering of the FOMC since President Donald Trump rolled out sweeping import levies on April 1. According to the minutes, conversations at the meeting centered on the potential inflationary effect of the duties as well as their ramifications on markets and financial stability. Participants remarked on some of the atypical developments that arose during the period of heightened volatility, including the fact that longer-term bond yields rose and the dollar depreciated as equities and other risk assets declined. "These participants noted that a durable shift in such correlations or a diminution of the perceived safe-haven status of U.S. assets could have long-lasting implications for the economy," the minutes read.While balance sheets for banks, households and nonfinancial institutions remained strong, the event had participants considering future changes to the central bank's emergency liquidity facilities. One topic of conversation was the Standing Repo Facility, a backstop for money markets that allows primary dealers and other counterparties to pledge certain high-quality assets as collateral for overnight borrowing. A "few participants" suggested that central clearing for the facility could encourage its use during periods of stress and might better alleviate stress in the market.Another focal point was leveraged trades involving U.S. sovereign debt. Specifically, the Fed's open market operations staff highlighted the unwinding of positions in which investors sought to profit on the spread between Treasury yields and interest rate swaps as a factor in market volatility.Meanwhile, another leveraged trade involving Treasury cash and futures prices — an area of particular risk in the eyes of many academics and policy specialists — "appeared to remain largely stable."The minutes also revealed additional details about the committee's review of its monetary policy framework. During the meeting, the group discussed the flexible average inflation target, or FAIT, approach implemented during the last review in 2020. That policy suggested that the Fed allow inflation to run slightly above 2% after extended periods in which price growth was below that target. In the years since FAIT was adopted, many academics and other economists have criticized the approach, with some saying it caused the Fed's slow response to inflation in 2021 and 2022. Central bank officials have argued that FAIT played no role in the judgment that post-pandemic inflation was "transitory," but the meeting minutes suggest the FOMC will move away from the approach. Participants said the FAIT strategy has "diminished benefits" when risks of large inflationary shocks are elevated and when policy is far from the effective lower bound. "Participants indicated that they thought it would be appropriate to reconsider the average inflation — targeting language in the Statement on Longer-Run Goals and Monetary Policy Strategy," the minutes read. "Participants noted that an effective monetary policy strategy must be robust to a wide variety of economic environments."

US Treasuries trimmed early losses after a $70 billion auction of new five-year securities lured solid investor demand.The yield on 10-year benchmark Treasuries was up about three basis points following Wednesday's sale, after earlier climbing more than five basis points. READ MORE: Home-refinancing gauge falls to three-month low as rates near 7%The shift came as the US government's offering of five-year notes drew a yield of about 4.071%, slightly below the level seen immediately before the auction. Indirect bidders, a category of investors that includes foreign central banks, took down a record 78% of the debt. "It looks like a solid auction," said Zachary Griffiths, head of investment-grade and macroeconomic strategy at CreditSights Inc. Despite the recent concern about foreign demand for US debt, "it does not appear there has been a mass exodus."The five-year auction spotlights a maturity that's become a sweet spot for many investors because it's less sensitive to monetary and fiscal policies than its shorter- and longer-dated peers. It follows solid demand for a two-year auction on Tuesday and comes ahead of Thursday's $44 billion sale of seven-year notes. Still, that appetite has yet to clearly extend to longer-term debt, which has been dragging after a string of weaker auctions around the globe. A 40-year auction sale in Japan met the weakest demand since July. READ MORE: Trump mulling exit nudges GSE stocks higher, MBS widerBonds that mature over a longer horizon have been hit as investors grow concerned about widening fiscal deficits in some of the world's big economies, including the US. "It's hard to argue with the concern over the fiscal policy," said James Athey, a portfolio manager at Marlborough Investment Management Ltd. "We are likely to oscillate fairly significantly just given the extent of uncertainty and the inflation risks which are still ahead."Last week, the US 30-year yield touched 5.15%, its highest since October 2023. The gap between five and 30-year yields has risen above 90 basis points, around its highest since 2021.On Wednesday, the 30-year yield was higher by about three basis points to 4.98%. The question for some on Wall Street now centers on when those lofty yields start to entice some buyers. In the futures market, a block trade targeting a narrower yield gap between 10- and 30-year bonds stood out. "Bonds actually look attractive now from a yield perspective," said Justin Onuekwusi, chief investment officer at St James Place. He added that he expected continued volatility, citing President Donald Trump's tax bill, trade tariffs and political uncertainty.