Ten-year Treasury yields remain in a narrow range of 4.35%-4.50%. Fixed-rate mortgage rates change with the 10-year Treasury yield. When it goes up or down, mortgage rates tend to do the same. Financial markets are awaiting upcoming inflation and employment data to gauge the Federal Reserve's likely course of action regarding interest rate cuts.

As the housing inventory shortage remains a concern, the National Association of Realtors released inventory data that showed a positive trend. In April, unsold inventory increased 9 percent from March and is up 16.3 percent from one year ago. As of the latest released data, inventory is at a 3.5 month supply compared to 3 month supply in April 2023. For context, typically 5 to 6 months inventory is considered a balanced market.

Be on the lookout for next Friday's Core PCE (Personal Consumption Expenditures) report, the Fed's preferred inflation metric. The Core PCE report excludes volatile food and energy prices and provides a clearer picture of long-term inflation trends, which the Federal Reserve uses to guide its monetary policy decisions.