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 decreased slightly for the week of February 21st to February 27th. Mortgage rates have been dropping for the past week, but these probably won't be long-term, drastic decreases. Rates will probably decrease by the end of 2025. However, any declines will likely be gradual.
The latest Consumer Price Index report, issued earlier this month, delivered unwelcome news about inflation. According to the report, the uptick in inflation that has been occurring over the last few months accelerated in January, climbing 3% on an annual basis. This surprise uptick could significantly influence the Federal Reserve's stance when it convenes for its mid-March meeting, potentially delaying the interest rate cuts many analysts had predicted for early 2025.
While buyers may be hoping that mortgage rates fall soon, experts largely agree that mortgage rates will remain near today's rates for now. So, if you're financially prepared, it makes sense to consider moving forward with your home purchase now rather than waiting.
Fed Watch: Target rate (in bps) possibilities, according to the CME Group (as of 02/27/2025 – 12:00 PM EST):
Market Review: Optimal Blue's Production Metrics:
Termination Totals
In January, the US government employed 2.4 million civilians excluding the post office. In addition to 200,000 probationary employees, 75,000 who took the deferred resignation, President Trump also ordered a hiring freeze. The government needs 200,000 hires/year to keep up with retirements, etc. It's quite possible that government employment will fall by up to 475,000 in CY25, 20% of the workforce, saving $52.5 billion: a backdoor approach to reduced regulation -
Elliot F. Eisenberg, Ph.D., Economist
News You Can Use
- Mortgage Rates Drop Today—the Lowest It’s Been in 2 Months
- Home Price and Sales Forecast February 2025: Zillow’s Predictions
- New Home Sales Decrease to 657,000 Annual Rate in January
- Fed's Barkin says interest rates may have to rise to combat inflation headwinds
- Single-Family Home Size Increases
- Here’s what happens if Fannie Mae and Freddie Mac go private
Interest rate and annual percentage rate (APR) are based on current market conditions as of 02/27/2025, 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 Prosperity Home Mortgage, LLC. Not available in all states. Rate is as of 02/27/2025 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.
