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 remained flat for the week of January 17th to January 23rd. For now, the consensus is that mortgage rates will ease down in 2025. President Donald Trump lobbed his first volley at the Federal Reserve, saying Thursday that he will apply pressure to bring down interest rates.
Looking ahead, experts forecast mortgage rates in 2025 to hover between 6% and 7%, following the latest decline characterized by slight dips rather than dramatic changes. According to Greg McBride, a financial analyst, while a temporary breach of the 7% threshold could occur, rates are unlikely to dip below 6% in the immediate future.
Fed Watch: Target rate (in bps) possibilities, according to the CME Group (as of 01/23/2025 – 12:30 PM EST):
Market Review: Optimal Blue's Production Metrics:
Cost of Constructing a Home in 2024:
US Housing Market Data – redfin.com
Index Indications
In 2022 and 2023, only 29% of firms in the S&P 500 index beat the index. This lopsidedness means relatively few companies are doing very well, and a majority are performing below average. From 2000-2022, the percentage was about 50%, which is what you would generally expect. Aside from 2020, the last time the percentage of winners was so low was in 1998 and 1999 during the dotcom boom. Ugh. - Elliot F. Eisenberg, Ph.D., Economist
News You Can Use
- Fed Governor Waller sees potential for multiple interest rate cuts in 2025
- Higher Mortgage Rates Likely to Keep Existing Home Sales Near Multi-Decade Lows
- Interest rates won’t fall as fast as expected if tariffs stoke inflation, UBS CEO says
- California wildfires boost U.S. jobless claims to six-week high
- Here’s how climate change is reshaping home insurance costs in California — and the rest of the U.S.
- Q1 2025 mortgage rates: 30-year fixed loans to average 6.7%
Interest rate and annual percentage rate (APR) are based on current market conditions as of 01/23/2025, 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 01/23/2025 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.
