Mortgage rates went on a bit of a ride last week. First, a bond auction didn’t go so well, raising concerns about the U.S. government’s rising debt.
But just as everyone started to worry about that, attention shifted to something new—tariffs!
Mortgage Rates and Bonds: What’s the Connection?
Mortgage rates depend a lot on bond yields, and last week they fluctuated quite a bit.
My 2025 forecast predicts mortgage rates will hover between 5.75% and 7.25%, with bond yields ranging from 3.80% to 4.70%. For now, these shifts are pretty normal unless we see big changes in the economy or job market.
Housing Market: What’s Happening?
The housing market showed some interesting trends:
- Mortgage Applications: Applications to buy homes were up 13% compared to last year but dropped slightly from the previous week—pretty standard for this time of year.
- Inventory is Growing: More homes are hitting the market! Last week, the number of homes for sale increased by over 19,000. That’s great news for buyers looking for more options.
- Home Prices: About 38% of homes for sale have seen price cuts, a little higher than last year. Prices are expected to grow slowly this year, around 1.77%.
What’s Next?
This week, we’ll get key economic updates, including inflation numbers and home price trends.
These reports could affect mortgage rates and the housing market, so stay tuned.
In a nutshell, last week was a reminder of how unpredictable the market can be, with debt concerns and tariffs pulling the strings. Let’s see what happens next!