Market Commentary:
Interest rates increased for the week of January 3rd to January 9th. Several factors moved mortgage rates, some more impactful than others. In December, the Federal Reserve cut its key benchmark rate for a third time, yet mortgage rates have only risen since policymakers began cutting rates in the fall. The next Fed announcement comes January 29th.
So, why are mortgage interest rates still so high? First, the market is waiting to see how Trump's second term will impact the U.S. economy and housing market. Second, mortgage rate trends tend to follow the 10-year Treasury yield, which has been rising for the last month. Third, it looks unlikely that the Federal Reserve will cut the federal funds rate at its January meeting. All this to say — don't expect rates to plummet anytime soon. If you want to buy a house sooner rather than later, holding out for lower rates might not be worth it.
Fed Watch: Target rate (in bps) possibilities, according to the CME Group (as of 01/09/2025 – 12:30 PM EST):
Market Review: Optimal Blue’s Production Metrics:
More Than One-Third of Homeowners Say They’ll Never Sell
9 states are back above pre-pandemic housing inventory levels—these 5 states are getting close:
Wealth Wellspring
From 1999-2007, median family wealth was $50,000. From 2008 through 2014 it doubled to $100,000, where it remained through 2018. From 2019 through 2022 it vacillated substantially but nonetheless rose to $125,000. However, starting in 2023 through the end of2024, because of rising home prices and stellar equity gains, median wealth doubled to $250,000, a major reason why consumer spending is so strong. Going forward, equities increasingly matter. - Elliot F. Eisenberg, Ph.D.,Economist
News You Can Use:
· Housing Sentiment Finishes 2024 Higher Despite December Dip – Fannie Mae
· Fed’s Waller Supports Further Cuts, Says Inflation Moving Lower
· Fed officials are worried about the inflation impacts from Trump’s policies, minutes show
· 2024 Property Tax Balloon Causing Sticker Shock for Homeowners
· The Best Markets for First-Time Homebuyers in 2025 Revealed
· Pending Home Sales Moved Up 2.2% in November, Fourth Straight Month of Increases
*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 01/09/2025, 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 HomeServicesLending, LLC. Not available in all states. Rate is as of 01/09/2025 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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