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Today’s Mortgage Rates in Feb 2025
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.
Jan 13, 2025
Mortgage Rate Outlook: Maintaining a Locking Bias 🔒
With mortgage rates already elevated, the robust labor market and potential stimulus chatter create more upward pressure. While the CPI could offer some relief if it signals slower inflation, the risk of floating remains high. If you need to secure your rate soon, consider locking to avoid unexpected rate hikes. As always, keep your eye on the headlines and be ready to adjust your strategy if conditions shift.
1️⃣ The Labor Market Rockets Higher ⚙️📈
Friday’s jobs report showed payrolls jumping by 256,000 in December, far outstripping the 165,000 economists expected. Coupled with an unemployment rate dipping from 4.2% to 4.1%, it’s no surprise that yields on the 10-Year Treasury Note soared to levels unseen since 2023, pushing mortgage rates higher.
There’s a silver lining, though: November’s jobs data was unusually weak, and this bounce could partly be workers returning after strikes or hurricane disruptions. Still, the damage is done for now, and unless future reports show a slowdown, market sentiment will remain under pressure.
2️⃣ CPI Report in the Spotlight 🔍💰
This Wednesday’s Consumer Price Index (CPI) release is the next major milestone for the mortgage world. If inflation remains tame—despite a booming labor market—it could ease the current surge in rates.
However, a strong labor market often fuels rising wages, which in turn can stoke inflation. Even if December’s CPI numbers come in soft, the Federal Reserve seems laser-focused on jobs data, making a rate cut at their upcoming meeting less likely. For now, odds of a rate cut when the Fed meets next at the end of this month are low.
3️⃣ Tax Cuts: Potential Stimulus or Inflation Spike? 💰⚠️
Lawmakers are floating a tax cut stimulus plan aimed at boosting the economy, leaving many to question whether additional growth measures are wise given persistent inflation concerns. Fears that increased spending or reduced tax revenue could push inflation further skyward have rattled the bond market, sending yields—and mortgage rates—climbing.
To keep inflation in check, many argue the government should focus on reducing the budget deficit, either by trimming spending or raising taxes, rather than ramping up stimulus. Of course, any significant shift would likely require lifting the debt limit, a sticking point for numerous legislators.
Jan 06, 2025
Mortgage Rate Outlook: Locking Bias Remains 🔒
Between the 10-Year yield’s climb, unwavering job market strength, and surging oil prices, the odds of a significant drop in mortgage rates are slim in the immediate term. Staying locked in remains the safer bet for now.
If you have any questions or need advice on your mortgage strategy, feel free to reach out!
1️⃣ Rocky Start for Mortgage Rates 🔥📈
The 10-Year Treasury Note yield jumped to 4.63% in early morning trading, keeping mortgage rates at higher-than-desired levels. Even though inflation has cooled from around 7% to 2.4%, bond investors worry about a potential resurgence, citing rising deficits, tariffs, tax cuts, and a persistently strong labor market.
The saving grace? If the Federal Reserve decides to reduce the pace of its Quantitative Tightening soon, it could offer more liquidity to the bond market. That injection of liquidity might help rates stabilize and even trend lower. But for now, the caution light is on.
2️⃣ “Jobs Week” in Focus 🤝💼
This week brings several pivotal reports on the December labor market, culminating in Friday’s Bureau of Labor Statistics (BLS) data—detailing job creation numbers and the latest unemployment rate. With the Fed determined to keep rates high until they see tangible signs of a cooling labor market, mortgage-watchers are rooting for a softer-than-expected outcome.
If job creation surges again, we’re likely to see mortgage rates edge even higher. Keep an eye on this number—it’s a big deal for shaping the near-term direction of rates.
3️⃣ Oil Prices Surge: A Warning for Rates 🛢️⚠️
Meanwhile, oil prices are on the upswing, nudging up the cost of gas at the pump. This spike stems partly from anticipation of robust economic growth in China, which translates into heftier energy demand. Higher oil prices also serve as a forward indicator of potentially rising inflation—a sworn enemy of low mortgage interest rates.
Dec 31, 2024
Mortgage Rate Outlook: Elevated Yet Watchful 📈🔍
Heading into 2025, mortgage rates remain elevated. There’s a strong ceiling that has prevented them from spiking further, but the risk of floating is still considerable. If you’re considering locking in a rate, now may be the time—at least until we see a decisive break to the downside for rates.
1️⃣ US Debt Ceiling Concerns and Mortgage Rates 💵📈
The US debt ceiling is set to take center stage as incoming President Trump seeks to eliminate the annual cap on how high the Federal deficit can go. Removing this cap would allow lawmakers more flexibility in government spending, but it could also place upward pressure on mortgage rates.
Here’s why: As the Federal deficit grows, the US Treasury issues more treasuries to finance the debt. With a higher supply of treasuries hitting the market, investors demand a higher return, pushing yields on the 10-Year Treasury Note higher. Since mortgage rates are closely tied to the 10-Year yield, more spending without limits could spell trouble for homeowners and prospective buyers hoping for lower rates.
2️⃣ 2024: A Mixed Bag for the Economy 📉💼
2024 proved to be a stellar year for most segments of the US economy, except for housing, mortgages, and solar industries, which ended the year battered.
On the brighter side, wages rose well above inflation, supporting strong consumer spending. For homeowners who locked in rates of 4% or lower before 2022, their finances remain unphased by today’s elevated mortgage rates. Additionally, with stock portfolios near record levels, many retirees feel confident about their financial futures.
Looking ahead, 2025 could bring a softer labor market and slower economic growth, but the year begins with strong momentum across most sectors.
3️⃣ Housing Market Update: Growing Inventory on the Horizon 🏠📊
Although 2024 saw existing home sales dip to 4.15 million—reaching multi-decade lows—the positive development is an increase in active listing inventory. During the pandemic, inventory levels were minimal as buyer demand far exceeded available homes. Once mortgage rates climbed, homeowners locked into low interest rates had little incentive to sell and move, reinforcing decades-low supply.
However, as households evolve and families’ needs change, more homeowners may soon decide to “bite the bullet” and list their homes—an important step toward unlocking the housing market. This added supply would help both first-time and move-up buyers find suitable properties, contributing to a healthier market overall.
Dec 23, 2024
What’s Next for Mortgage Rates?📉
The 10-Year Treasury Note yield hit a key resistance ceiling and appears to be stabilizing. While there’s no immediate rush to lock in rates, any shift in market sentiment could reverse improvements. If you opt to float, ensure you’re ready to lock quickly if indicators turn negative.
The “Hawkish Cut”: Fed’s Mixed Message 📉
The Federal Reserve’s interest rate cut last week was anything but dovish. While the central bank decided to reduce rates, some members questioned whether a cut was warranted at all. The Fed’s future projections for 2025 saw planned cuts scaled back from 1% to ½%, citing stronger-than-expected economic activity (reinforced by last Wednesday’s 3.1% GDP growth) and persistently high inflation. Mortgage rates reacted swiftly, rising by at least ¼% in the hours following the announcement.
Congressional Funding Turmoil: Musk’s Influence Emerges🔍
A bipartisan spending bill aimed at keeping the government funded was upended on Thursday, following tweets from Elon Musk urging that it “must not be passed.” Incoming President Trump quickly backed Musk, prompting Republicans to withdraw their support for the measure. This incident underscores Elon’s growing sway over the financial decisions of the US government and signals a contentious future for any attempts to direct federal spending. Ultimately, a renegotiated bill narrowly averted a government shutdown.
Inflation Progress: PCE Provides Relief
Friday offered some welcome news for bond markets, as the Fed’s favored inflation gauge—Personal Consumption Expenditures (PCE)—revealed a modest 0.1% price growth in November. Headline inflation on an annualized basis now sits at 2.4%, while the Core rate (excluding food and energy) is 2.8%—still above the Fed’s 2% target. Although there’s more work to do, the data suggest some easing of inflationary pressures.
