Fed expected to resist pressure from Trump for July rate cut

by Matt Carter | Jun 25, 2025 | Industry, News Feed

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Economists and investors expect Federal Reserve policymakers to continue to resist calls by the Trump administration to lower interest rates until they see more data on how tariffs and other policies are impacting inflation and employment.

Grilled by House and Senate lawmakers at separate hearings this week, Fed Chair Jerome Powell defended the central bank’s reluctance to resume cutting rates, saying the job market remains solid and that there’s no rush to make a decision.

After the Fed voted unanimously on June 18 to hold rates steady, Associated Press Reporter Chris Rugabar asked Powell if “cracks in the jobs market” and housing data “that have been pretty weak” could justify future rate cuts.

“I think if you look at the overall picture, what you’re seeing is 4.2 percent unemployment, and an economy that’s growing at a rate [that] appears to be 1-1/2, 2 percent — maybe a little better than that,” Powell said.

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While consumer sentiment has “come up off of very low levels,” it’s still depressed, Powell acknowledged.

“The housing market is a longer run problem, and also a short run problem,” Powell said. “Basically, we have a longer run shortage of housing, and we also have high [mortgage] rates right now. I think the best thing we can do for the housing market is to restore price stability in a sustainable way and create a strong labor market.”

Trump took to social media after the vote and urged the Federal Reserve Board to “override this Total and Complete Moron!” referring to Powell. “Maybe, just maybe, I’ll have to change my mind about firing him?”

Vice President J.D. Vance and Federal Housing Finance Agency Director Bill Pulte kept up the heat on Tuesday, with Vance saying he’d “love to hear an argument for why Powell cut rates 50 points right before an election but can’t do it now with inflation lower.”

Pulte claimed Powell’s interest rate policies “are not based on data but instead on Powell’s politicization of the Fed,” calling them “dangerous.”

On Wednesday — a few hours before ordering Fannie Mae and Freddie Mac to study allowing homebuyers to count crypto holdings as an asset — Pulte called on Powell to resign.

Trump told reporters Wednesday that he already has “three or four people” in mind who might replace Powell — although it’s unclear whether he will try to fire him.

Trump appointed Powell to lead the Fed during his first term, and his term is not set to end until May 2026.

One reason the Trump administration has grown impatient with Powell is that inflation has been nearing the Fed’s 2 percent goal. The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred gauge of inflation, showed the price of goods and services rose 2.1 percent in April from a year ago, the Bureau of Economic Analysis reported last month.

But while the Fed can pull levers that give it direct control over short-term interest rates, mortgage rates are determined by investor demand for mortgage-backed securities (MBS), which fund most home loans.

As the Fed cut short-term interest rates by a full percentage point in its final three meetings of 2024, mortgage rates moved by about the same amount in the opposite direction, as incoming economic data suggested inflation was on the rise again.

The last time the Fed cut rates, mortgage rates went up

Powell has been saying for months that Fed policymakers need more time to assess the impacts of the Trump administration’s policies in areas including tariffs, immigration, taxes and regulation.

The “dot-plot” in the Fed’s latest Summary of Economic Projections shows members of the Federal Open Market Committee (FOMC) expect to cut the short-term federal funds rate just twice later this year, to between 3.75 percent and 4 percent.

“Lawmakers this week have been no more successful than journalists last week in getting Chair Powell to set out a more concrete timetable for the policy easing anticipated by a slender majority of [Fed policymakers] this year,” economists at Pantheon Macroeconomics said in their latest U.S. Economic Monitor.

The CME FedWatch Tool, which tracks futures markets to predict future Fed moves, shows investors think there’s only a 25 percent chance of a July rate cut. But bets placed by futures market investors as of June 25 put the odds of a September rate cut at 90 percent — up from 64 percent on June 18.

Fed policymakers will receive “substantial extra information” if they hold off until September to make a decision, Pantheon economists Samuel Tombs and Oliver Allen wrote Wednesday.

By September, “we think the FOMC will have seen a sequence of three weak labor market reports through August,” Tombs and Allen predicted, with the unemployment rate hitting 4.5 percent by August — 4 months sooner than currently projected by the Fed.

“That would represent a resounding call to ease policy, even before the full effect of the tariffs on inflation is visible in the data,” Pantheon forecasters wrote.

In the meantime, mortgage rates have been holding steady in the high sixes.

Mortgage rates stabilize

After hitting a 2025 low of 6.48 percent on April 4, rates on 30-year fixed-rate conforming mortgages have been rangebound between 6.75 and 7 percent in May and June, according to lender data tracked by Optimal Blue.

Weekly surveys of lenders by the Mortgage Bankers Association show that demand for purchase loans was up 12 percent last week from a year ago.

“Applications increased slightly overall driven by FHA refinances, but conventional applications saw declines over the week,” MBA Deputy Chief Economist Joel Kan said, in a statement. “The average loan size for purchase applications declined to $436,300, the lowest level since January 2025, driven by decreasing conventional purchase loan sizes.”

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Government regulator lets BofA mortgage off the hook 3 years early

by Matt Carter | Jun 25, 2025 | Industry, News Feed

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In its latest move to ease regulations, the Consumer Financial Protection Bureau (CFPB) has terminated a 2023 consent order with Bank of America aimed at addressing allegations that the lender reported false information about mortgage borrowers to federal regulators.

Bank of America was accused of failing to ask some mortgage applicants demographic questions about their race, ethnicity and gender as required by the Home Mortgage Disclosure Act (HMDA) — data that’s collected to uncover potential discriminatory lending patterns.

The CFPB claimed that in addition to failing to collect that demographic information from some borrowers, Bank of America falsely reported that the applicants had chosen not to respond.

Bank of America knew “that many loan officers receiving applications by phone were failing to collect the required data as early as 2013, but the bank turned a blind eye for years,” the CFPB alleged in announcing a $12 million settlement.

Under the terms of a Nov. 27, 2023, consent order, Bank of America also agreed to implement a compliance plan ensuring that it collected, recorded and reported required HMDA data used by the CFPB and other federal regulators to detect redlining.

While the consent order was to remain in effect for a minimum of five years — until late 2028, if no further reporting violations occurred — Office of Management and Budget Director Russell Vought on June 4 signed an order terminating it, saying Bank of America had fulfilled its obligations.

The CFPB did not publicize the action, which was first reported by Reuters this week. Bank of America declined Inman’s request for comment on the early termination of its consent order with the CFPB.

Bank of America mortgage originations, 2020-2024

Source: iEmergent analysis of HMDA data.

Bank of America was the nation’s fifth-largest mortgage lender last year by dollar volume, with $29.5 billion in originations, according to an analysis of HMDA data by iEmergent.

Since the end of the pandemic-era refinancing boom fueled by low interest rates, most of the bank’s mortgage business has been with homebuyers, with $17.1 billion in purchase loans funded in 2024.

Regulatory rollback

Vought and his top deputy at OMB, Dan Bishop, are leading the Trump administration’s efforts to downsize the CFPB, with Vought serving a dual role as the bureau’s acting director.

The Trump administration, which is seeking to cut 90 percent of the CFPB’s workforce, has put about 20 active enforcement cases on hold and sought to vacate a number of settlements that the bureau reached under the Biden administration.

The acting director of the CFPB’s enforcement division, Cara Petersen, resigned on June 10, saying in a farewell email that “the bureau’s current leadership has no intention to enforce the law in any meaningful way.”

Two days later, U.S. District Judge Franklin Valderrama declined the CFPB’s motion to vacate a settlement it reached last year in a fair lending case involving Chicago mortgage broker Townstone Financial, saying that doing so “would erode public confidence in the finality of judgments.”

Russell Vought

Vought had claimed that an internal review of the case determined that the CFPB “abused its power” in pursuing the case against Townstone in order to “further the goal of mandating DEI in lending.”

Consumer groups that defended the Townstone settlement in court called the CFPB’s request to vacate it “unprecedented,” and argued that granting it would establish a “dangerous and destabilizing precedent.”

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Is Zillow skating dangerously close to thin ice?

by Carl Medford | Jun 25, 2025 | Industry, News Feed

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It is no secret that real estate agents have had a long-term love-hate relationship with Zillow since its online debut in 2006. Its advent, along with the other web-based portals that began to appear (Trulia, Realtor.com, Homes.com), inaugurated the transition of real estate information from the carefully guarded hands of real estate agents to the masses and fundamentally changed the industry. 

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Although there has always been significant tension between the online portals and real estate brokerages and their agents, the current war between Zillow and Compass has caused many to take a deeper look at Zillow and, as a result, has raised more than a few questions about some of Zillow’s practices. 

A look at the war between Compass and Zillow

To begin, let’s take a quick look at the current issue with Compass. In a nutshell, Zillow takes listings from the various MLSs across the country and posts them on its website. It then captures leads (mostly buyers), which Zillow then turns around and sells to participating agents who pay (at a basic level) a monthly fee for a prescribed number of leads or (for a higher level of better “qualified” leads) a monthly fee and a subsequent referral fee for closed transactions.

The rub here for many real estate agents is that they believe the leads should belong to them because they (as listing agents) do all of the legwork up front to develop a relationship with a seller, pay the costs of marketing and servicing the listing, and so on. 

Zillow’s contention has always been that listing agents and their brokers do not do a good enough job of online marketing, thus providing a foothold for companies such as Zillow and Realtor.com, which, by spending significant amounts to market those leads online, should reap the benefits. 

Zillow and other online portals rely on MLSs to provide them with data feeds that, in turn, provide the flow of listings they need to continue their business model. Enter Compass, which, by setting up its own independent feed of off-market listings, is cutting off some of the potential flow of listings to Zillow, thus undermining Zillow’s business model.

Compass — and I’ve certainly commented on this in other posts — has been flying in the face of many other brokerages with their blatant opposition to NAR’s Clear Cooperation Policy.

In retaliation, Zillow is refusing to allow any listings that have been previously marketed on off-MLS sites for more than a day to come onto its site. Let me clearly state that I support NAR’s CCP and, as such, do not agree with any attempts to set up private listing portals. With that out of the way, Zillow’s action does raise a number of questions that will now be played out in the courts. 

How Zillow’s brokerage status changes the picture

An important distinction to understand is that, unlike web-based portals such as Realtor.com, Homes.com and Trulia, Zillow is actually a broker in all 50 states. This means that Zillow operates by the same rules that govern brokers and their agents, a fact that separates Zillow from information-only portals.

One immediate question that arises from any given broker refusing to post any listing is the question of potential steering. 

Although I am not an attorney or capable of dissecting the finer points of the conflict, the overall topic of Zillow brings up some other questions about Zillow’s long-term intent and how real estate agents can continue to navigate with this “elephant” in the room effectively.  

At the heart of the issue is whether or not a portal is providing information or advice. If they are providing information, then they are acting as a web-based portal. If they provide advice, however, then they are entering into brokerage territory. There is no doubt that this is a finely nuanced discussion, and, at the end of the day, is fraught with legal implications. 

Take, for example, the idea of posting school scores. If you are simply a web-based information portal, then you can link to sites such as Great Schools and display their results for any given property. As such, and with the correct disclaimer, information is being displayed with no advice or interpretation.

As a broker or agent, however, the rules are different. To stay clear of fair housing violations and to avoid any appearance of steering, brokerages and their agents can disclose the existence of sites that provide school scores and even provide their clients with links to those sites, but should not communicate the actual scores themselves. 

Brokerages and real estate agents can do the following:

• Provide links or resources where buyers can research school performance themselves.
• Direct buyers to official sources for more detailed and up-to-date information (GreatSchools.org, Niche.com, state Department of Education websites).

Brokerages and their agents should avoid: 

• Providing specific scores or data. 
• Providing assessments or judgements (“this is a horrible school” or “that is a great school district”) can be considered to be steering and a violation of fair housing laws.
• Excluding or recommending neighborhoods based on school information.

To avoid any fair housing laws, Zillow and other brokerage sites, such as Redfin, follow strict guidelines to maintain a legal safety net:

• They present data from Great Schools “as-is,” not curated in any way.
• They provide disclaimers indicating the source of the data and encourage users to verify the information independently.
• They let users of their website draw their own conclusions.
• They ensure there is no editorializing or interpreting of the scores.
• They maintain a role closer to a search engine or web-based informational portal that provides them with more leeway than a licensed real estate agent offering guidance or advice.

Even though Zillow provides adequate legal disclaimers, there is still risk, and any brokerage displaying school scores opens itself up to potential violations in an indirect manner. 

• When it comes to fair housing laws, impact matters. Whereas the intent may have been to simply provide information, if that data is used by a consumer to avoid certain properties or areas, then the heart of fair housing laws has been violated. If the school scores are posted on an information-only web portal, there is no issue. If they are posted on a brokerage site, however, it is different.  
• If school scores can be demonstrated to steer certain demographic groups toward or away from any given area — even in a passive manner — this could then be challenged in court, especially if there’s a pattern of disparate impact.
• This is not a new issue: Consumer advocacy groups and HUD have complained about this practice, though, to date, no landmark case has held Zillow liable. Responding to concerns that have been raised about this practice, while Zillow has made changes to the way the information is being displayed, it chosen not to remove the data. 

As you can hopefully see by now, the inherent nuances are the issue, which brings up the next potential issue. 

Zillow’s ‘suggested offer prices’ 

I am going to guess that many agents simply do not know about this feature on Zillow’s site. Set approximately 50 percent of the way down the page of an active listing, this feature not only provides Zillow’s trademark Zestimate (along with its accuracy percentage over the past 10 years), but also outlines strategies a buyer can employ potentially to write a winning offer. Maybe it’s just me, but this looks like advice, not information. 

As an example, a home listed at $1,098,000 shows a Zestimate of $1,075,400. Under the Explore offer strategies headline are four buttons: Strong, Competitive, Moderate and Weak. 

• By pressing the Strong button, Zillow suggests that an offer of $1.09 million-plus has an over 90 percent chance of winning.
• Press the Competitive button, and Zillow suggests that by writing an offer between $1.07 million and $1.09 million, you now have a 70 percent to 90 percent chance of getting your offer accepted.
• Hit the Moderate button, and the numbers $1.07 million to $1.07 million are displayed, along with a 50 percent to 70 percent chance of getting your offer accepted.
• Finally, by using the Weak button, Zillow suggests that an offer between $1.01 million and $1.07 million has less than a 50 percent chance of winning. 

While these numbers for the specific property I used are close to the list price, I have seen instances where the recommended numbers are dramatically lower than the list price. 

Here are some important things to consider: 

• With this feature, even though the numbers provided are automated, Zillow is providing advice, which puts it squarely in the category of a broker or real estate agent. 
• It is using its Zestimate to provide the basis for recommendations, which, as has been demonstrated amply over the years, is not accurate enough to provide sound pricing advice. 
• By providing advice as to a recommended offer price lower than the list price, it is acting in direct competition with the listing agent and the seller.  

All of this poses some serious concerns and questions: 

By offering pricing suggestions — even algorithmically — this can be construed as real estate advice, which is inherently a part of a real estate agent’s fiduciary role.

This can interfere with buyer-agent relationships if a buyer’s agent recommends a specific offer price, based on their market knowledge, conversations with the listing agent and condition of the property, and Zillow recommends a lower price. This could potentially:

• Undermine the agent’s ability to represent their client
• Create confusion and mistrust between agent and clients
• Significantly impact negotiation strategies

This can also introduce potential liability:

• By providing “advice,” Zillow could potentially be construed as establishing an agency relationship with a buyer. 
• If buyers rely on Zillow’s “suggested pricing” and either lose out on a home by offering too little or, inversely, overpay, there could be potential legal risk and liability, especially if it could be proven that the data was flawed. (Since the data is based on the Zestimate, which does not provide information based on property condition, photos, etc., the chances for error are high.)

While Zillow attempts to mitigate concerns or liability by labeling its suggested prices as “an estimate,” including disclaimers such as “not a guarantee” and avoiding direct “you should offer this” language, they are still, in my opinion, skating on very thin ice. 

ChatGPT provides the following assessment: 

Zillow is skating a fine line by posting suggested offer prices. It’s not illegal, but it treads dangerously close to giving what amounts to licensed advice — especially since Zillow holds brokerage licenses.

They’re relying on:

• • Automation, not personal guidance.
  • Disclaimers to reduce liability.
  • Their platform status, not direct agent representation.

As a result, this practice has drawn criticism from brokerages, real estate agents, legal analysts, consumer advocacy groups and industry watchdogs alike. 

The irony here cannot be overstated: While we are in the midst of a battle over Clear Cooperation, with Zillow refusing to show listings on its portal that are not on the MLS, sellers, aware of the fact that Zillow’s Suggested Offer Prices may in fact be competing directly against their chances of a competitive price (to be fair, Zillow sometimes recommends higher than list price offers), may not want their listings (even though they are on the MLS) shown on Zillow.

What a tangled web we weave. 

New residential sales drop nearly 14% in May, their sharpest in 3 years

by Lillian Dickerson | Jun 25, 2025 | Industry, News Feed