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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 January 10th to January 16th. Several factors have driven up rates this winter. Strong economic data lowered expectations for the Federal Reserve's interest rate cuts and caused 10-year Treasury yields (a key benchmark for home loan rates) to surge. Concern that Donald Trump's incoming administration will stoke inflation and boost government debt deficits has rattled the mortgage market.
The Fed has cut its main interest rate by a full percentage point since September. The intent is to give the economy breathing room after the Fed earlier hiked the federal funds rate to a two-decade high in hopes of slowing the economy enough to stifle inflation.
Fed Watch: Target rate (in bps) possibilities, according to the CME Group (as of 01/16/2025 – 12:30 PM EST):
Market Review: Optimal Blue's Production Metrics:
Total number of single-family permits issued year-to-date (YTD) nationwide – January to December 2024:
Top ten metro areas that issued the highest number of single-family permits:
Average Sales Price of Houses Sold for the United States (ASPUS):
Bond Bear
Bond Bear Looking at a graph of yields on US Treasurys, one is immediately confronted with the fact we are now in the sixth year of the third Treasury Great Bond Bear Market (GBBM) since 1790. The first GBBM was from 1899 to 1920. The second commenced in 1946 and terminated in 1981, and the current GBBM began in 2020 and remains ongoing. GBBMs are long lived, let’s hope this one isn’t. - Elliot F. Eisenberg, Ph.D., Economist
News You Can Use
- 2025 will be a year of Non-QM player diversification
- Housing Market Shocker: Home Prices Surge Despite High Mortgage Rates and Tight Inventory – Fannie Mae
- More homes on the market are going ‘stale’ due to this big listing mistake
- Inflation report offers a mixed bag for the housing industry
- Initial jobless claims rise, surpassing forecast and previous figures
- Home Price Growth Reaccelerates in Fourth Quarter
- Housing Jan 13th Weekly Update: Inventory down 1.7% Week-over-week, Up 23.6% Year-over-year
- Why it’s so hard to find starter homes in the U.S.
Interest rate and annual percentage rate (APR) are based on current market conditions as of 01/16/2025, 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 HomeServices Lending, LLC. Not available in all states. Rate is as of 01/16/2025 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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