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GCA FORUMS NEWS – The Mortgage and Real Estate Edition

Friday, February 14, 2025

Federal Reserve Board Update

With continued inflation pressure, the Federal Reserve has indicated that it may raise interest rates. In their meetings, they noted that they may increase rates by 25 basis points in the next meeting to control inflation and stabilize the economy.

10-Year Treasury Yields

• Today, the market yield on a 10-year Treasury is approximately 3.75%.
• This is the market’s reaction to the Fed’s expected rate change and new economic data.

Current Mortgage Rates

• The average rate for a 30-year fixed mortgage is currently 6.5%.
• This is marginally lower than the previous weeks and is expected due to changes in Treasury yields and investor mood.

National Real Estate Affordability

• The index of affordability for real estate on a national level continues to be strained.
• In many parts of the country, home prices increase at a much faster rate than wages.
• This is still a major concern and is especially challenging for first-time homebuyers.

Housing Market Trends

Cities with declining housing values.

• San Francisco
• Seattle
• New York City

The above three cities are among the larger metros that have noted relative declines. Along with high costs, changes in demographics are diffusing demand.

Cities Where Home Values are Increasing:

• Unlike regions like California, cities like Austin, Nashville, and Phoenix benefit from increased housing values.
• This is due to robust employment opportunities and an inflow of people into the cities.

Investment Opportunity:

• Texas, Florida, and North Carolina are the most liberal states, making them ideal for purchasing homes and real estate.
• These states are gaining fame with new people and investors.
• This is because of the attractive employment opportunities and lowered taxation rates.

Impact of Federal Job Cuts

• The federal government’s action to eliminate tens of thousands of jobs will likely negatively affect the housing and mortgage markets in places that depend on federal work.
• This could lower the demand for housing, meaning the values need to be adjusted.

Fraud Investigations in the Housing and Mortgage Sectors:

• Allegations of fraudulent mismanagement of federal housing funds and lack of proper control over housing programs have collapsed markets under scrutiny within other federal housing and mortgage agencies within the department.

Top Housing and Mortgage News Stories This Week

Fed Signals Rate Increases:

• Affecting Markets and the Economy.
• 10-Year Treasury Yield and Mortgage Rate Correlation.

Why are people unable to afford housing?

Market analysis of selected regions:

• Overview of especially conspicuous householders by moves.
• Examining the consequences on real estate: Federal job cuts and the markets.
• While federal monetary policies, the state of the economy, and even some geographical factors still shape the mortgage and real estate markets, they are continuously changing.

All interested citizens should take note of the periodical changes in their surroundings to strategize in their environment properly.