Is it too late to jump on the spring housing demand train?

Entering the dynamic landscape of 2025, we are met with a whirlwind of data and predictions that shape the future of mortgage rates. As we brace ourselves for what lies ahead, let’s delve into the key points and trends that will influence the housing market in the coming year.

1. Mortgage Rates and 10-year Yield Forecast
   • My 2025 forecast has set the stage with a projected range for mortgage rates between 7.25% to 5.75%.
   • Alongside this, the 10-year yield is expected to fluctuate between 4.70% to 3.80%.

The current state of the 10-year yield hovering around 4.60% indicates a pivotal moment. With minimal movement observed, we find ourselves perched near the upper echelons of the forecasted 10-year yield and mortgage rates for the year. As we embark on jobs week, the labor data’s impact on mortgage rates becomes palpable, warranting a closer look at specific data points of significance in our analysis.

1. Mortgage Spreads
   • Mortgage spreads received a favorable boost in 2024, preventing potential losses in the construction workforce due to rising rates.
   • Visualizing scenarios of spread levels from the previous year sheds light on the potential trajectory of mortgage rates in 2025, accentuating the importance of stable spreads.
2. Weekly Housing Inventory Data
   • Historically, housing inventory tends to hit its nadir in March and April, typically following the post-COVID era trends.
   • Monitoring the cyclical patterns of inventory can provide insights into future market trends, with the lowest point witnessed in February last year, urging us to stay vigilant.
3. New Listings
   • The anticipation for burgeoning new listings data in 2025 is met with cautious optimism following the subdued growth observed in the previous year.
   • The prospect of a ‘return to normal’ in the housing market beckons, signaling a surge in new listings and a promising peak season.
4. Price-cut Percentage
   • Fluctuations in mortgage rates usually impact home prices, reflecting in the price-cut percentage each year.
   • Observing the interplay between mortgage rates and home prices guides our understanding of market dynamics, especially amidst the seasonal fluctuations witnessed currently.

In the upcoming week of jobs week, bond auctions, and Fed speeches, pivotal decisions and reports will shape the trajectory of mortgage rates and housing market dynamics. The tumultuous year ahead beckons us to prepare for a roller coaster ride of economic shifts and real estate fluctuations. As we navigate the first week of 2025, fasten your seatbelts, for another year of twists and turns awaits in the realm of housing market intricacies.