01/21/2025
For anyone wondering why the housing market is still slower than normal, even when the Fed "cuts rates". Generally, mortgage rates follow the 10 year treasury bills, not what you see on the evening news per se. Here's what Wells Fargo just posted:
Mortgage rates rose 2 basis points to 6.93% in the week ending January 9. The rate averaged 6.72% in December, down from November’s 6.81%. Over the last 52 weeks, the rate averaged 6.73%, with a high of 7.22% in early May and a low of 6.08% in late September. The rates quoted are based on the 30-year fixed-rate conforming mortgages sent to Freddie Mac.1
The core PCE deflator, which strips out the volatile food and energy sectors, rose 2.8% in the year ending in November. That’s the same increase recorded in October. The year-ago gauge has remained in a narrow range from 2.6% to 3.1% over the last twelve months. The lack of significant progress in this measure is one of the reasons the Fed and the financial markets have reduced their expectations about Fed rate-cutting in 2025.
WHAT DOES THIS MEAN?! We are likely to see mortgage interest rates stay in the 6's for a minute. That said, if you're a buyer, it is a pretty good time to buy, since there is not a lot of competition and a lot of sellers are giving concessions they didn't give a year or more ago. Yes, you'll have an interest rate that is uncomfortable for a couple years maybe, but if you found the RIGHT HOUSE, that is the WIN. You can always refinance later when the rates come down.
Call me if you have any questions.
