Consumer Confidence Just Hit a New All-Time Low. Rates Are Falling Anyway.

Consumer sentiment hit 44.8 in the University of Michigan's final May reading — the lowest in the survey's 74-year history — driven by elevated gas prices, rising inflation expectations, and economic anxiety tied to the Iran conflict. At the same time, mortgage rates have been falling for four straight consecutive days as oil prices eased, with Freddie Mac's weekly survey showing the 30-year fixed averaging 6.51%. The same variable — Strait of Hormuz disruption — is creating both effects simultaneously, which means when the conflict resolves, consumer confidence and rates could improve together, releasing months of pent-up demand into the market at once. Against that backdrop, this week's data also confirmed the 34th straight month of home price appreciation, jobs came in nearly double expectations, and pending sales rose in three of four regions — demand is present, prices are holding, and the rate ceiling is moving in the right direction.

Enjoy your weekend!

-John

6:02

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