This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.
Market Commentary:
Interest rates remained flat for the week of February 14th to February 20th.
Most economic forecasts call for a gradual decline in mortgage rates this year, but homebuyers shouldn't expect miracles. Fannie Mae expects average 30-year fixed mortgage rates to remain above 6.5% for most of the year. Predictions for slightly lower mortgage rates in late 2025 are based on expectations for cooler inflation, a weaker labor market and more rate cuts by the Federal Reserve. Yet none of these appear to be imminent. Last week, the January Consumer Price Index showed inflation rising by 3% over the past 12 months, moving away from the Fed's target of 2%. If the central bank does resume cutting interest rates, it's not likely to be until summer or fall.
Fed Watch: Target rate (in bps) possibilities, according to the CMEGroup (as of 02/20/2025 – 12:00 PM EST):
Market Review: Optimal Blue’s Production Metrics:
The housing market's seasonal effect visualized:
Median Home Prices in States With Booming Growth:
Delisting Data
Seventy-three thousand homes were pulled from sale in December, representing almost 1 in 10 homes on the market, a 64% Y-o-Y surge, and the biggest December jump since 2015. There is clearly significantly more desire to sell than buy. This tells us that much of the inventory that hit the market in 2024 just sat there. This is clearly disinflationary and should be a warning to builders to keep inventory tight. -Elliot F. Eisenberg, Ph.D., Economist
News You Can Use:
· Housing Market Gets Bad Sign From Builders
· 15Housing Markets Where Prices Are Falling Ahead Of The Spring Selling Season
· Mapped: Median Home Prices in States With Booming Growth
· FOMC Minutes: Concern about tariffs, "take time" on any additional Rate Cuts
· Housing Starts Decreased to 1.366 million Annual Rate in January
· California Flood Risk Exceeds Fire Concerns, According to Study
*Communication is intended for Industry Professionals only and not intended for Consumer Distribution
Interest rate and annual percentage rate (APR) are based on current market conditions as of 02/20/2025, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Prosperity Home Mortgage, LLC. Not available in all states. Rate is as of 02/20/2025 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac’s economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac’s business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.
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