The Mortgage Economic Review is a monthly summary of Key Economic Indicators, Data, and Events pertinent to Mortgage, Housing, and Finance Professionals.

 

The Government is almost caught up on the Economic Data that was delayed by the October shutdown. The Census Bureau released 3 months of data on New Home Sales in May. Some Data during the shutdown was never collected, which will affect reporting for the whole year. Continue to expect large revisions in the data.

 

AT A GLANCE – Key Economic Events and Data released during May 2026

• Interest Rates: The 10-year Treasury yield rose to 4.45% (May 29) from 4.40% (Apr 30).
• Housing: Existing Home Sales rose 0.2% (0.0% YoY), New Home Sales fell 6.2% (-11.2%  YoY). Home Prices are up 0.8% to 1.7% YoY.
• Labor: The US Economy added 115,000 Jobs during April. The Unemployment Rate was unchanged at 4.3%, and Wages are growing at 3.6% YoY.
• Inflation: April CPI rose 0.6% (+3.8% YoY), and PCE rose 0.4% (+3.8% YoY).
• The Economy: US GDP grew at a 1.6% annualized rate in 1Q2026, up 2.6% YoY.
• Consumers: Retail Sales rose 0.5% in April (+4.9% YoY), Consumer Confidence and Sentiment fell in May.
• Stock Markets surged in May: Dow +2.8%, S&P +6.2%, Nasdaq +8.4%.
• Oil Prices fell to $87/Barrel (May 29) from $106/Barrel (Apr 30).

Interest Rates and Fed Watch

There was no FOMC meeting in May. Kevin Warsh was sworn in as Chairman of the Federal Reserve on May 20th. He takes the helm at a time when the Fed is in a tough spot. Back in January, Economists expected 3 rate cuts in 2026. Now they expect zero – maybe 1 Rate hike in 2026 if Inflation doesn’t come down soon. Inflation in the 2020s is looking a lot like Inflation in the 1970s. That’s not good. We know how it ended: the Fed jacked up Interest Rates to 18% to “Break the Back of Inflation” in 1979. At this point, no one expects that to happen again, but if Inflation doesn’t come down, the Fed will have to raise rates. Keep in mind the Fed only controls the short end of the yield curve with the Fed Funds Rate. The market sets the long end of the yield curve.

• 10-Year T-Note Yield rose to 4.45% (May 29) from 4.40% (Apr 30).
• 30-Year T-Bond Yield rose to 4.99% (May 29) from 4.98% (Apr 30).
• 30-Year Mortgage rose to 6.53% (May 28) from 6.30% (Apr 30).
• 15-Year Mortgage rose to 5.87% (May 28) from 5.64% (Apr 30).

 

Housing Market Data Released during May 2026

The Census Bureau caught up on releasing New Home Sales Data for February, March, and April. It’s good to see current data, but I suspect there will be several major revisions in the next few months, so take these 3 reports with a grain of salt. Currently, there are 1,470,000 Existing Homes for Sale plus 489,000 New Homes for Sale. That’s 2,000,000 homes available for people to purchase, but Home Sales are flat. Why? Because a large majority of Home Buyers today cannot afford these Homes. Home Prices rose roughly 40% from 2020 to 2023, while wages rose only 15%. Home Prices outpaced Wage increases by a lot. That difference devastated the Purchasing Power of Home Buyers. It’s not a lack of Inventory – it’s a lack of AFFORDABLE Inventory.

• Existing Home Sales (closed deals in April) rose 0.2% to an annual rate of 4,020,000 homes (3,640,000 SFR + 380,000 Condos), unchanged YoY. The median Single Family Home price is $422,300, up 1.0% YoY. The Median Condo price is $374,100, up 1.1% YoY. The Inventory of Homes for Sale rose 5.8% to 1,470,000 Homes, up 1.4% YoY.
• Pending Home Sales Index (signed contracts in April)  rose 1.4%, up 3.2% YoY.
• New Home Sales (signed contracts in April) fell 6.2% to a seasonally adjusted annual rate of 622,000 Homes, down 11.3% YoY (679,000 New Homes were sold in 2025, 686,000 in 2024, & 668,000 in 2023). The median New Home price rose 8.0% to $422,500, up 2.2% YoY (Peak $496,800 Oct 2022). The average price rose 0.7% to $508,800, down 1.1% YoY (Peak $568,700 Dec 2022). There are approximately 489,000 New Homes for sale, down 2.2% YoY (Low of 281,000 in Oct 2020).
• Building Permits (issued in April) rose 5.8% to a seasonally adjusted annual rate of 1,445,000 units, down 0.2% YoY. Single-Family Permits fell 2.6% to an annual pace of 872,000 homes, down 5.5% YoY.
• Housing Starts (excavation began in April) fell 2.8% to a seasonally adjusted annual rate of 1,465,000, up 4.6% YoY. Single-Family Starts fell 9.0% to 930,000 units, down 2.4% YoY.
• Housing Completions (completed in April) rose 4.8% to a seasonally adjusted annual rate of 1,449,000 units, down 2.0% YoY. Single-Family Completions fell 1.0% to an annual adjusted rate of 903,000 homes, down 7.0% YoY.
• S&P/Case-Shiller 20 City Home Price Index fell 0.2% in March, up 0.8% YoY.
• FHFA Home Price Index rose 0.1% in March, up 1.7% YoY.
• The NAHB Index rose 8.8% to 37 in May from 34 in April, up 8.8% YoY.

 

Labor Market Economic Data Released during May 2026

The Labor Market continued to chug along in April. The US Economy added 115,000 New Jobs during April. Where were the jobs created? Health care (+37k), transportation/warehousing (+30k), and retail (+22k). In the meantime, the Federal Government shed another 9,000 jobs in April. Since its peak in October 2024, the Federal Government has shed 348,000 jobs or 11.5%. The Unemployment Rate held steady at 4.3%, and there are currently 6,866,000 Job Openings.

• The Economy added 115,000 New Jobs during April.
• The Unemployment Rate was unchanged at 4.3% in April and March.
• The Labor Force Participation Rate fell to 61.8% in April from 61.9% in March.
• The Average Hourly Wage rose 0.2% in April, up 3.6% YoY.
• Job Openings fell to 6,866,000 in March from 6,922,000 in February, down 1.2% YoY.

 

Inflation Economic Data Released during May 2026

Another month of bad Inflation news. The CPI was higher than expected, rising 0.6% in April, while the PCE rose 0.4%. In the last 3 months, Energy and Food Prices were the star components driving Inflation higher. In April, Shelter Cost jumped 0.6%. Why? This was due to an anomaly from the Government shutdown and the convoluted way the BLS calculates Shelter Cost (which is beyond the scope of this article). That distortion should disappear next month, and the Shelter component of the CPI should (hopefully) be normalized. The Government Shutdown 7 months ago has faded from memory, but its impact on Economic Data is still being felt. Despite the anomaly concerning Shelter Cost, we still have volatile Energy and Food prices to contend with.

• CPI rose 0.6%, up 3.8% YoY    |  Core CPI rose 0.4%, up 2.8% YoY
• PPI rose 1.4%, up 6.0% YoY    |  Core PPI rose 0.6%, up 4.4% YoY
• PCE rose 0.4%, up 3.8% YoY  |  Core PCE rose 0.2%, up 3.3% YoY

 

GDP Economic Data Released during May 2026

The 2nd estimate of 1st Quarter 2026 GDP indicated the US Economy grew at a 1.6% annual rate in 4Q2025, up 2.6% YoY. Durable Goods Orders jumped 7.9% in April, far exceeding Economists’ expectations. This pleasant surprise is an indication the US Economy will continue on a growth trajectory in the near future.

• US GDP grew at a 1.6% annual rate in 1Q2026, up 2.6% YoY.
• Durable Goods Orders rose 7.9% in April, up 9.3% YoY.
• Industrial Production rose 0.7% in April, up 1.4% YoY.
• Capacity Utilization rose to 76.1% in April from 75.7% in March.

 

Consumer Economic Data Released during May 2026

The Consumer kept their wallets open in April as Retail Sales rose 0.5%. Most of that increase was due to higher gasoline prices. That means they were spending money because they had to, not because they were buying more goods. In the meantime, Consumer Sentiment fell to 44.8 in May. A number below 48 has historically been associated with Recessions. However, other Economic macro data does not predict a Recession any time soon.

• Retail Sales Rose 0.5% in April, up 4.9% YoY.
• Consumer Confidence Index fell 0.7% to 93.1 in May from a revised 93.8 in April.     
• Consumer Sentiment fell 10.0% to 44.8 in May from 49.8 in April, down 14.2% YoY.

 

Energy, International, and Things You May Have Missed

• West Texas Intermediate Crude fell to $87/Barrel (May 29) from $106/Barrel (Apr 30).
• North Sea Brent Crude fell to $91/Barrel (May 29) from $111/Barrel (Apr 30).
• Gasoline (Wholesale Futures) fell to $3.03/Gal (May 29) from $3.82/Gal (Apr 30).
• Natural Gas rose to $3.29/MMBtu (May 29) from $2.76/MMBtu (Apr 30).

 

The Mortgage Economic Review is a concise summary of Key Economic Data that influences the Mortgage and Housing Markets. It’s a quick read that keeps busy Professionals updated on important Economic Information. Feel free to share this with colleagues in the Mortgage, Housing, Finance, and Banking business. To have the Mortgage Economic Review emailed to you each month, click here.

 

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This Economic Review is for informational and educational purposes only and should not be construed as investment, legal, financial, or mortgage advice. The information is gathered from sources believed to be credible and may be opinion-based and editorial in nature. Mortgage Elements Inc does not guarantee or warrant its accuracy or completeness, and there is no guarantee it is without errors. This newsletter is primarily intended for use by Housing and Finance Professionals, but it can be useful for anyone interested in Economics. This newsletter is not an advertisement to extend credit or solicit mortgage originations. © Copyright 2026 Mark Paoletti, Mortgage Elements Inc., All Rights Reserved.