{"id":85504,"date":"2026-05-11T15:32:32","date_gmt":"2026-05-11T22:32:32","guid":{"rendered":"https:\/\/www.redfin.com\/news\/?p=85504"},"modified":"2026-05-11T15:32:33","modified_gmt":"2026-05-11T22:32:33","slug":"weekly-economic-update-may-11-2026","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/weekly-economic-update-may-11-2026\/","title":{"rendered":"Mortgage Rates May Swing This Week As Markets Watch Inflation and Iran Developments"},"content":{"rendered":"

This Week In A Nutshell: <\/b>Rates are likely to stay choppy this week as markets weigh new inflation data on Tuesday against any developments in the peace talks with Iran.<\/span><\/p>\n

Upcoming Attractions<\/b><\/h3>\n

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The main event this week is Tuesday\u2019s April CPI (consumer price index) report. Headline inflation is expected to be firm because of higher energy prices, and core inflation may also pick up slightly. Shelter inflation could look stronger because some rent data missed during last fall\u2019s government shutdown will be captured in April. That does not necessarily mean underlying inflation is reaccelerating, but it makes it harder for the Fed to sound dovish.<\/span><\/p>\n

Thursday brings retail sales, which are expected to slow after a strong March. We\u2019ll also get PPI (producer price index) on Wednesday, jobless claims on Thursday, and industrial production on Friday. And finally, a long list of Fed officials will speak this week, and markets will be paying close attention after the Fed\u2019s recent<\/span> warning<\/span><\/a> that they\u2019re thinking about thinking about hiking.<\/span><\/p>\n

Last Week\u2019s Highlights<\/b><\/h3>\n

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Last week\u2019s<\/span> jobs data<\/span><\/a> pointed to a labor market that is firmer than expected, but not booming. April payrolls rose 115,000, above expectations, and the 6-month hiring average rose to 55,000, the highest since last May. That lowers recession risk, even though the labor market remains much slower than it was a few years ago. The details were more mixed. The unemployment rate held at 4.3%, but underemployment rose and labor-force participation slipped. Wage growth still looks contained, which is one reason the report does not suggest overheating.<\/span><\/p>\n

Consumer sentiment also fell to its lowest level on record, a warning sign for housing because people tend to delay big purchases when they feel this bad about the economy.<\/span><\/p>\n

Diving a Little Deeper<\/b><\/h3>\n

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The key takeaway is that the case for near-term rate cuts weakened. The labor market looks strong enough for the Fed to wait, while inflation is still too high for the Fed to consider easing.<\/span><\/p>\n

For housing, that means the path to lower mortgage rates still depends on either a cleaner resolution of the energy shock or clearer evidence that growth and hiring are weakening. The frustrating dynamic is that the labor market is strong enough to keep the Fed patient, but consumer sentiment is weak enough to keep buyers cautious. That suggests a market that continues to bounce along the bottom unless mortgage rates fall more meaningfully.<\/span><\/p>\n

However, we are seeing some evidence that the housing market is firming up. Last week,<\/span> pending sales hit the highest level in nearly 4<\/span><\/a> years<\/span><\/a>. The impetus may be that housing demand was underperforming how low rates had fallen in late 2025\/early 2026 because of a weakening labor market followed by bad weather to kick off the year. Now that the labor market is on better footing and affordability is gradually improving with tepid home price growth, we may see demand continue to rise despite rates being a bit higher than prior to the Iran war.<\/span><\/p>\n

Redfin Housing Market Reports<\/b><\/h3>\n

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Bay Area Luxury Home Prices Have Jumped 13% Since Launch of ChatGPT<\/a><\/strong><\/p>\n