Concerns about economic stability and the potential for tariff-induced inflation are keeping mortgage rates higher for longer.

Homebuilders also noted a steep drop in demand in April, with sentiment among that group at the lowest level since the end of 2023.

The dip in the U.S. credit rating indicates that ratings agencies believe the government is at a higher risk of default on its debt. While the U.S. rating still remains relatively high, the decrease may make investors more hesitant to lend to the government, and demand higher compensation for lending in the form of higher interest rates.