Fed holds rates steady as it notes rising uncertainty

Plus: USDA’s rural manufactured housing rule goes into effect

May 09, 2025

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Disclaimer: Average mortgage rates as of May 08, 2025. © MND Daily Rate Index.

1. Fed holds rates steady as it notes rising uncertainty

The Federal Reserve on Wednesday held its key interest rate unchanged as it waits for the Trump administration’s trade policy to take shape and sees its impact on a sputtering economy.

In a move that carried little suspense given the wave of uncertainty sweeping the political and economic landscape, the Federal Open Market Committee held its benchmark overnight borrowing rate in a range between 4.25%-4.5%, where it has been since December.

“Uncertainty about the economic outlook has increased further,” the statement said. “The Committee is attentive to the risks to both sides of its dual mandate and judges that the risks of higher unemployment and higher inflation have risen.”

2. USDA’s rural manufactured housing rule goes into effect

The U.S. Department of Agriculture has finalized a rule enabling manufactured homes to qualify for its Single Family Housing Direct and Guaranteed Loan Programs, a move aimed at easing access to affordable rural housing.

Effective May 5, the rule lowers regulatory barriers and extends support to energy-efficient homes in nonprofit-run land-lease communities. The update follows favorable public feedback to a 2023 proposal and is expected to boost supply amid national housing shortages.

USDA emphasized that eligible homes must meet federal standards set by the 2000 Manufactured Housing Improvement Act.

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4. Fannie Mae: Few consumers see now as a good time to buy or sell homes

Consumer sentiment around housing remains weak despite modest economic gains, according to Fannie Mae’s April survey. Just 23% of respondents think it’s a good time to buy a home, while only 17% say it’s a good time to sell — a 13-point drop from March. Affordability remains a top concern as home prices and mortgage rates stay high.

Meanwhile, job confidence rose sharply, with 49% of consumers saying they’re not worried about job loss, and more households reporting income gains. The mixed signals highlight a cautious market: consumers feel more financially secure, but many remain priced out of homeownership.

“Affordability continues to be the greatest barrier to homeownership,” said Doug Duncan, Fannie Mae’s chief economist. “Even as consumers feel more secure in their jobs, high prices and interest rates are keeping many on the sidelines.”

5. Federal court halts HUD effort to tie grants to Trump executive orders

A federal judge temporarily barred the Department of Housing and Urban Development from enforcing Trump administration directives on grant funding, siding with cities and counties that say the new conditions are unconstitutional.

  • The 14-day restraining order, issued Wednesday by U.S. District Judge Barbara Rothstein, halts HUD, the Department of Transportation, and the Federal Transit Administration from tying $726 million in federal grants to executive orders targeting DEI efforts, immigration policy, gender identity, and abortion.

Eight local governments—including San Francisco, Boston, and New York City—argued that the changes politicize funding meant to address homelessness and violate constitutional protections.

☀️ You’re all caught up. See you on Monday!

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