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Today’s Mortgage Rates in March 2025
Mar 10, 2025
Mortgage Rate Outlook: Floating, But Watchful 🔄📉
Mortgage rates held steady last week, but they’ll need to break through another level of support before making another move lower. If you can closely monitor the market, you might want to wait and see if rates improve in the coming days. However, be ready to lock in quickly if sentiment shifts.
As always, we’ll keep an eye on the trends and provide updates as the market evolves. Stay informed, and don’t hesitate to reach out if you have questions!
1️⃣ Job Growth Isn’t What It Seems
The Bureau of Labor Statistics (BLS) released its latest jobs report on Friday, showing that 151,000 new jobs were created in February. At first glance, this looks like a sign of strength. However, most of these jobs were part-time positions, which typically pay less. This is important because the Federal Reserve is keeping interest rates high until the job market shows more weakness.
We are starting to see some cracks—the unemployment rate ticked up from 4.0% to 4.1%. And in the coming months, we expect it to climb even higher as layoffs from government-mandated budget cuts start to take effect. This slowdown in the job market could help push interest rates lower in the near future.
2️⃣ Trade War Tensions Are Rising
The U.S. economy is facing growing uncertainty due to shifting tariff policies. Companies are hesitant to invest when they don’t know what to expect next. Since uncertainty is the enemy of business growth, we’ll likely see corporate spending slow down.
Even worse, other countries are fighting back—China, Mexico, and Canada are all threatening retaliatory tariffs, which would make U.S. exports more expensive overseas. On top of that, reports suggest some consumers in those countries are boycotting American products in protest.
The global economy is deeply connected. A policy change in one country can send shockwaves through others. And while trade wars don’t involve weapons, they can still be extremely damaging.
3️⃣ Stock Market Slips as Recession Fears Grow
The U.S. stock market is feeling the heat. Last week, the S&P 500 dropped 3.1%, and early Monday trading shows it’s down another 2%. The bigger concern? The S&P is on track to fall below its 200-day moving average for the first time since 2023—ending a 336-day streak above this critical level.
Why does this matter for mortgages? Recession fears usually push mortgage rates lower. The U.S. economy has been overheated for too long, fueled by heavy government spending that has driven up inflation and interest rates. A slowdown could be just what’s needed to bring stability back.
Mar 03, 2025
Mortgage Rate Outlook: Floating, But Watchful 🔄📉
Mortgage rates continue to improve, and we are maintaining a floating bias for now. However, with economic uncertainty lingering, we are watching market sentiment closely and ready to lock in rates if conditions shift.
1️⃣ Fed Rate Cut Looking More Likely as Tariff Fears Ease 📉🏛️
Concerns that tariffs might force the Federal Reserve to raise interest rates are quickly fading. With economic conditions softening, businesses and consumers are feeling the effects of tariffs much like a tax hike—leading to higher prices on imported goods without boosting corporate profits or wages. Instead, this added cost is dampening economic activity.
As a result, the Fed is increasingly likely to cut rates, with markets now pricing in a 70% chance of a June rate cut—a major shift from earlier expectations.
2️⃣ Inflation Report Supports a Lower Rate Environment 📊💵
Friday’s Personal Consumption Expenditures (PCE) report came in right on expectations, with prices rising 0.3% in January—a seasonal increase that bond investors had already factored in.
Here are the key takeaways:
✅ Headline inflation fell from 2.6% to 2.5% annually
✅ Core inflation (excluding food & energy) dropped from 2.9% to 2.6%
✅ Personal incomes jumped 0.9%, largely due to annual wage increases and Social Security adjustments
This report reassured the bond market, easing fears of persistent inflation and helping mortgage rates trend lower in the near term.
3️⃣ Debt Pressures Are Rising: A Growing Concern 💳🚨👥
Red flags in consumer debt continue to emerge:
📌 Auto loan delinquencies (60+ days) surged 7% in January—hitting an all-time high
📌 Credit card minimum payments are also at record highs
Why is this happening? Higher interest rates have cut off a financial lifeline that many homeowners relied on for decades: mortgage refinancing to consolidate debt. In past years, falling mortgage rates allowed borrowers to refinance every few years, reducing their overall debt burden.
Now, after four straight years of rising mortgage rates, that cycle has been broken, leaving many consumers struggling to keep up with their payments. If rates don’t start coming down soon, rising consumer debt could trigger broader financial instability.
Feb 24, 2025
Mortgage Rate Outlook: Caution on Floating 🔒📈
Mortgage rates have now fallen below their 200-day moving average, a key technical level that often signals a trend reversal. If this downward trend holds, it could put additional pressure on mortgage rates to fall further. That said, floating your rate remains risky. If you choose to float, keep a close eye on market developments and be ready to lock in your rate should conditions start to shift unexpectedly.
1️⃣ Existing Home Sales Hit Historic Lows 📉🏠
Recent reports indicate that existing home sales have dropped to levels not seen since 1995. Considering the substantial population growth since then, this slowdown underscores just how sluggish the housing market has been over the past couple of years. On the bright side, inventory levels of existing homes are rising, which could help moderate the rapid pace of home price appreciation. For first-time homebuyers who’ve been priced out by soaring home values and high mortgage rates, increased inventory is a welcome development. However, for true affordability to improve, we need a significant drop in either mortgage rates or home prices—or ideally both. Let’s hope that 2025 brings the relief the housing market desperately needs.
2️⃣ Key Report to Watch This Friday: CPI & Labor Data 🔍📊
All eyes are on this Friday’s release of January’s Personal Consumption Expenditures (PCE) Index, the Fed’s favorite gauge of consumer inflation. If this report shows that inflation is cooling, it could boost expectations for future Fed rate cuts, benefiting mortgage rates. For rates to continue their downward trend, we need to see a weakening labor market alongside falling inflation. If both the PCE report and the following week’s Bureau of Labor Statistics (BLS) report point to softness, that could pressure the Fed to start cutting rates sooner rather than later.
3️⃣ Softening Labor Market Could Help Rates 📉👥
The labor market is beginning to show signs of strain. Tens of thousands of federal employees have been laid off, and an additional 75,000 or more have accepted early buyouts. While these job losses are hard on those affected, they may help ease the tight labor market that’s been fueling inflation. Keep in mind, however, that many of these layoffs will take months to fully reflect in unemployment data. Over time, this shift could help push mortgage rates lower, but it may not offer immediate relief.
Feb 18, 2025
Mortgage Rate Outlook: Maintaining a Locking Bias 🔒
Looking ahead, the coming months will be critical. Inflation trends, rising consumer debt, and the “rate lock-in” effect are all exerting pressure on the housing market. While mortgage rates have shown slight downward pressure at times, they remain above both their 100- and 200-day moving averages. For now, the safe play is to maintain a locking bias until we see decisive shifts in market sentiment.
1️⃣ Inflation: Setback or Seasonal Noise? 📊🤔
Wednesday’s Consumer Price Index (CPI) report revealed that inflation climbed by 0.5% in January, nudging the annual headline rate from 2.9% to 3%. Core inflation, which strips out food and energy, rose by 0.4%. While these numbers might sound modest, they are a bit of a wake-up call for the Fed—especially since they rely on sustained declines to reach that coveted 2% target. Remember, January is notorious for being skewed by holiday spending and annual price adjustments. If this uptick turns out to be more than just seasonal noise, we could see delayed rate cuts and prolonged high mortgage rates. But if it’s just a temporary blip, there might be some relief on the horizon.
2️⃣ Record-High Credit Card Debt: A Warning Sign 🚨💳
Americans are carrying a staggering amount of credit card debt—now topping $1.21 trillion, which represents a 7.3% jump from last year. This surge is particularly striking considering many homeowners refinanced in 2020-2021 to wipe out consumer debt. Meanwhile, rising home values have boosted home equity, yet high mortgage rates have made it difficult to consolidate that debt into a home loan. If rates don’t drop soon, we could see a rise in credit card defaults, a scenario that would have far-reaching implications for the broader economy.
3️⃣ The “Rate Lock-In” Dilemma: Are Homeowners Stuck? 🏠🔒
The ultra-low mortgage rates of 2020-2021 created an unexpected predicament: many homeowners are now reluctant to move because they’re locked into 3% mortgages. Trading a rock-bottom rate for one near 7% just doesn’t add up.
Consider these points:
- Home Equity Growth: Home values have appreciated significantly, meaning many homeowners are sitting on substantial equity.
- Income Increases: Wages have risen—sometimes outpacing inflation—making the monthly payment differential more manageable than one might assume.
- Lifestyle Impact: For many, staying in a home that no longer fits their needs is causing frustration and stress.
For real estate professionals, this is a critical conversation. Helping clients see beyond just the mortgage rate—to focus on overall quality of life and long-term wealth creation—could be key to unlocking their next move.
Feb 11, 2025
Mortgage Rate Outlook: Maintaining a Locking Bias 🔒
With mortgage rates still above their 200-day moving average, we remain in a locking bias. Unless we get an unexpected inflation win this week, we don’t see a compelling reason to float rates at this time.
1️⃣Tariffs & Inflation – What’s the Real Impact?
There’s been a lot of chatter about tariffs and their potential impact on inflation. It’s important to understand that tariff-driven price increases are different from the inflation we saw post-COVID. Back then, businesses struggled to produce goods and services, leading to supply shortages and, ultimately, price hikes that boosted corporate profits and wages.
Tariffs, on the other hand, won’t fatten corporate bottom lines—they’re essentially a tax collected by the U.S. Treasury. While consumers will still pay higher prices, businesses won’t benefit, making it harder for them to keep wage growth in line with inflation. This key difference means that while tariffs may push prices up, they won’t fuel the same wage-price spiral we saw in previous inflationary periods.
2️⃣Strong Jobs Data Keeps Pressure on Interest Rates
Friday’s Bureau of Labor Statistics (BLS) report reaffirmed that the U.S. job market remains resilient. While January’s job gains came in at 143,000, upward revisions from the previous two months added another 100,000 jobs—essentially putting the real number at 243,000 new jobs. That’s well above expectations.
Adding to this, the unemployment rate dropped from 4.1% to 4%, signaling that we’re still operating near full employment. Why does this matter for mortgage rates? A tight labor market, combined with potential tariff-induced price hikes, makes it harder for the Fed to justify cutting rates. To see meaningful rate relief, we’d need a softer labor market.
3️⃣Inflation Watch: CPI Data Coming Wednesday
This Wednesday, we’ll get a fresh look at inflation with the release of January’s Consumer Price Index (CPI). The market is expecting a 0.3% increase, which is still higher than the Fed’s preferred target of 0.166% per month.
One of the biggest concerns? Wages are still growing faster than inflation, reinforcing the Fed’s stance that the labor market needs to cool down to keep price pressures in check. If Wednesday’s CPI report surprises to the downside, it could help support lower mortgage rates—but at this point, that’s more of a hope than an expectation.
Feb 04, 2025
Mortgage Rate Outlook: Maintaining a Locking Bias 🔒
Key Jobs Report on Friday: A Market Mover
This week is packed with crucial labor market data, culminating in Friday’s Bureau of Labor Statistics (BLS) report on new job creation in January. Given the ongoing strength in hiring, this report could have major implications for interest rates and mortgage pricing.
If job growth remains robust, it could reinforce the Fed’s concerns about cutting rates too soon and push mortgage rates higher. On the other hand, if we see signs of weakening employment, it could ease inflationary fears and increase the chances of rate cuts later this year.
With mortgage rates already on the rise and upcoming labor market data likely to drive further volatility, we recommend maintaining a locking bias for now. Given the current market conditions, locking in a rate sooner rather than later could provide more certainty for homebuyers and refinancers alike.
1️⃣Fed Holds Rates Steady, But Market Reacts to Powell’s Comments
As expected, the Federal Reserve left short-term interest rates unchanged in its latest policy meeting. However, it wasn’t the decision itself that rattled the market—it was Chairman Jerome Powell’s comments afterward. Powell highlighted the unexpected resilience of the labor market, which has continued to thrive despite two years of elevated interest rates. Historically, rising rates lead to increased unemployment, but that hasn’t been the case this time around.
This strength in the job market has raised concerns among Fed members about the potential consequences of rate cuts. If the Fed begins easing too soon, it could fuel even more job growth, potentially keeping inflation stubbornly above their 2% target. As a result, while the market has been anticipating multiple rate cuts this year, the Fed appears to be in no rush to lower rates until the labor market shows more definitive signs of cooling.
2️⃣Inflation Data: A Mixed Bag
On Friday, the Personal Consumption Expenditures (PCE) report for December—the Fed’s preferred measure of inflation—was released. It showed that overall consumer prices increased by 0.3% for the month, while the Core PCE (which excludes food and energy) rose by 0.2%.
On a year-over-year basis:
Headline inflation ticked up from 2.4% to 2.6%, signaling that inflation is still creeping higher.
Core inflation remained at 2.8%, which was in line with expectations but still well above the Fed’s 2% goal.
This data reinforces the idea that the Fed will not be rushing into rate cuts. While inflation has come down significantly from its peak, the last stretch toward 2% is proving to be the most difficult.
3️⃣Mortgage Rates Climb as Tariff Concerns Surface
Mortgage rates ticked higher on Friday after President Trump announced a fresh round of tariffs:
25% tariffs on goods from both Mexico and Canada.
An additional 10% tariff on Chinese imports.
This is particularly concerning for the new home construction industry, which relies heavily on Canadian lumber. Higher tariffs mean higher costs for builders, which could translate to higher home prices for buyers if these tariffs remain in place.
However, it’s important to remember that tariffs are often used as a negotiation tool. The Trump administration has tied these tariffs to efforts to curb drug smuggling across borders. If Mexico and Canada take stronger action, it’s possible these tariffs could be reversed quickly. But for now, the added uncertainty is putting upward pressure on mortgage rates.
Jan 27, 2025
Mortgage Rate Outlook: Maintaining a Locking Bias 🔒
The bond market and Federal Reserve policies are in a delicate balance, with mortgage rates caught in the middle. While there are signs of softening, uncertainty surrounding inflation, tariffs, and Fed actions mean rates may not fall as quickly as some hope. For borrowers, the key is to remain vigilant and act strategically when opportunities arise. Considering the likelihood of the 200 DMA being tough to break beneath, the safe play is to consider locking.
1️⃣ Deepseek Disrupts Markets, Mortgage Rates Benefit
News from Chinese AI startup Deepseek is shaking up global markets this morning. The company claims to match the output of ChatGPT at a fraction of the cost, threatening U.S. tech giants like Nvidia, who have dominated the stock market in recent years. This announcement has triggered a “flight to safety,” as investors move funds from stocks into bonds. The increased demand for bonds is helping to soften mortgage rates, which are now testing their 200-day moving average. This could offer some relief for those watching interest rates closely.
2️⃣World Economic Forum and Trump’s Call for Rate Cuts
At the World Economic Forum, President Trump called for an immediate drop in interest rates. This has fueled speculation that mortgage rates could fall rapidly, prompting some buyers and refinancers to sit on the sidelines in anticipation.
However, it’s important to note that since September, the Federal Reserve has reduced short-term interest rates by 1%, yet mortgage rates have risen by more than 1% over the same period. Even if the Fed cuts rates further, the impact on mortgage rates may not align. The most effective action the Fed could take to reduce mortgage rates would be to halt its current Quantitative Tightening (QT) policy. Ending QT would increase liquidity in the bond market, which could put downward pressure on mortgage rates.
3️⃣ Fed Meeting and Outlook for 2025
This Wednesday, the Federal Reserve will conclude its next Federal Open Market Committee (FOMC) meeting. While rates are expected to remain unchanged, the Fed has revised its outlook for 2025, reducing the number of projected rate cuts from four to just two. This shift reflects concerns over potential inflation, partly tied to uncertainty around tariffs proposed by President Trump. While it’s unclear if these tariffs will materialize or are simply a negotiation strategy, markets are pricing in higher inflation risks, which could keep mortgage rates elevated.
